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GM Pursuing Chrysler in Court for Holding Out on Payment for 2-Mode Hybrids

Smaller maker sticks GM for work done to develop models like upcoming Ram Hybrid pickup.

by on Jun.23, 2009

If at first you don't go green... Chrysler abandoned the Aspen Hybrid soon after launch but still hopes to come back with a 2-Mode Hybrid Ram pickup next year.  But it's left GM stuck with development cost bills as part of the smaller maker's bankruptcy.

If at first you don't go green... Chrysler abandoned the Aspen Hybrid soon after launch but still hopes to come back with a 2-Mode Hybrid Ram pickup next year. But it's left GM stuck with development cost bills as part of the smaller maker's bankruptcy.

Chrysler isn’t stopping with diesel-engine maker Cummins as the company leverages its time in bankruptcy court to modify its mountain of debt, including costs occurred while developing the current and future versions of its Ram pickup.

Among others left holding the bag is General Motors.  Attorneys for General Motors have filed documents with the court seeking full payment for development and production costs related to the Two-Mode Hybrid powertrain that Chrysler co-developed with GM and other partners, BMW and Daimler AG. GM is Chrysler’s Two-Mode transmission supplier for the upcoming 2010 Dodge Ram 1500 Hybrid.

GM’s documents say Chrysler has promised $173,477 to settle $531,275 in costs associated with: open receivables, payments for 2008 manufacturing costs, tooling, pre-production transmissions for the Chrysler Aspen and Dodge Durango Two-Mode Hybrid SUVs (which were killed after only two months of production), and supply agreements. The documents also state that Chrysler has assigned all production-related contracts to the “old” Chrysler, the one that effectively vanished when the “new” Chrysler, the one now controlled by Fiat, emerged from bankruptcy.

Subscribe to TheDetroitBureau.comUnder Chapter 11, Chrysler’s assets and liabilities were assigned to two entities: Old Chrysler and New Chrysler. Italian automaker Fiat, which recently merged with New Chrysler after that portion of the company emerged from bankruptcy, hasn’t (yet) assumed the Two-Mode Hybrid contract, leaving it with Old Chrysler.  But that doesn’t mean that the deal is dead, or that GM is walking away with holes in its pockets.

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