DETROIT — Chrysler LLC has scrapped its plan to buy seats for the 2010 Jeep Wrangler from an Indian seat supplier, Krishna Maruti Ltd.
A Chrysler source said the seat contract was being reopened for bid because the Indian company had not met Chrysler's quality standards. UAW sources confirmed that the Indian company was out and said negotiations are under way to make the seats at Johnson Controls' Northwood, Ohio, plant, where front and rear seats for the current Wrangler are made.
Ashok Kapur, chairman of Krishna Maruti, challenged the report, saying his company still has the contract.
"Everything is going forward," he said in a phone interview last week, adding that Krishna Maruti was not scheduled to supply seats until June 2009. "At the same time we are also waiting and watching as to what will happen to the future of that company. We haven't gotten any instructions right now."
Informed of Kapur's comments, the Chrysler source, who spoke on condition of anonymity, confirmed the deal was dead.
Chrysler had hoped to save money sourcing the seats from India. Skeptics doubted the deal would work. Seats usually are built close to vehicle assembly plants because they are heavy and awkward to ship. Also, front and rear seats must reach assembly lines in the proper sequence.
In this case, the seats would have been shipped to the Toledo Supplier Park in Ohio, where the Wrangler is built. Current Wrangler seat supplier Johnson Controls was to build front seats.
Chrysler's Indian seat initiative was part of purchasing chief John Campi's effort to source more parts from low-cost countries. Chrysler announced Friday that Campi is leaving for health reasons.
Tom LaSorda, Chrysler's co-president, said last May that Chrysler believed the arrangement could work, even though it went against conventional industry wisdom.
"It makes enough sense that it's much less costly than to do it locally," he said then. "In this particular case, it's the rear seats, which dramatically reduces complexity."
The rear seats have no electrical parts or heating elements and are simpler than front seats, LaSorda said at the time.
Krishna Maruti is a joint venture of Suzuki Motor Corp. in Japan and two Indian companies: Maruti Udyog Ltd. and Ashok Kapur & Associates.
Mehul Srivastava contributed to this report