Interior Supplier Sues Chrysler and Demands $110M in Damages

Faurecia Interior Systems Inc. filed a lawsuit against American automaker Chrysler, requesting around $110 million in damages, according to Crain's Detroit Business. The lawsuit filed Monday in Oakland County Circuit Court alleges that Chrysler didn't pay for a number of parts and services provided by Faurecia, including engineering, research & development as well as interior systems, the aforementioned source added. Faurecia currently supplies Chrysler a number of parts such as door panels, center consoles and instrument panels.

There are four models equipped with Faurecia's parts, as it follows: Jeep Liberty, Dodge Nitro, PT Cruise and Dodge Avenger.

Faurecia claims the initial agreement with Chrysler stated that payments were to be reconsidered in case the manufacturer reduces the forecasted production. However, pressured by the economic recession, Chrysler lowered production by 46 to 73 percent “below what it forecast when it signed the contract with Faurecia in 2004,” Crain's Detroit Business wrote citing lawsuit papers.

Faurecia is now demanding $45 million which Chrysler currently has to pay for engineering and R&D operations as well as an additional $58 billion in damages because the manufacturer reduced production of Sebring, Avenger and PT Cruiser.

Chrysler confirmed the lawsuit and said that Faurecia exaggerates with the damages it demands without taking into account the market conditions that leaded to the current situation.

“Faurecia has taken huge liberties in this lawsuit, grossly overstating alleged damages, and totally absolving themselves of any assumptions of risk contrary to our supply agreements with the company,” Mike Palese, Chrysler director of HR, diversity and legal communications, said in a prepared statement Tuesday.

Chrysler is one of the two American companies that received government support in December and, together with General Motors, is required to submit a viability plan by February 17.