Troubled supplier of Ford, FCA parts settles customer suit

Western Michigan stamping company Gill Corp. and German auto supplier Benteler Automotive Corp. have reached an out-of-court agreement after a lawsuit filed by Benteler alleged that Gill breached scheduling agreements that could have impacted its parts for Ford, Fiat Chrysler and Toyota vehicles.

Benteler confirmed in a statement that the suppliers reached a settlement last week. Neither supplier disclosed terms of the settlement to Automotive News. Benteler filed for dismissal of the suit on Nov. 21.

Word of settlement signals that Benteler has secured continued parts deliveries for its automaker customers, but officials declined to answer further questions about the matter.

The suit, filed Nov. 8 in 17th Circuit Court in Grand Rapids, Mich., states that Gill's financial struggles threatened scheduling agreements between the two suppliers and led Gill to terminate shipments and make "ransom" demands from its customers before finishing other shipments.

According to court filings obtained by Automotive News, Gill is contractually obligated to provide parts to Benteler until at least 2038 via previous scheduling agreements. Gill manufactures component parts that Benteler incorporates into exhaust-system assemblies used in the production of several models, including the Chrysler Pacifica and Dodge Caravan minivans, Jeep Wrangler and Gladiator, Ford Mustang and Toyota Corolla.

Gill informed Benteler it expects to close its Bond Avenue plant in Grand Rapids by April 2020.

Before the settlement, Benteler told Automotive News it is working to transition to other suppliers while winding down the Bond plant.

"Benteler continues to have open purchase orders at other Gill-affiliated businesses. We are in the process of executing an orderly transition of supply from Gill to new suppliers," Yves Ostrowski, head of communications and marketing for Benteler, said in a statement.

Gill did not say if the company received financing in order to continue operations during the Bond Avenue wind down.

"The Bond Avenue location is no longer appropriate for manufacturing as the neighborhood has grown into a residential, hotel and entertainment area of the city," Dave DeGraaf, president of Gill, said in a statement Thursday to Automotive News.

Link to GM strike

The lawsuit linked the scheduling breach to the recent UAW strike at General Motors and claims Gill attributed the closing of its operations to the labor stoppage.

"Given the impacts to the automotive industry supply chain caused by the recent GM strike and tariffs, further disruptions to the automotive industry and the attendant harm to the Michigan and/or national economy must be avoided at all costs," the lawsuit said. "Indeed, the GM strike was specifically cited by Gill's Chief Restructuring Officer as a cause of Gill's decision to close Bond/Alpine."

Benteler, based in Paderborn, Germany, ranks No. 34 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $8.1 billion in 2018. About 18 percent of the company's business is generated in North America.