Chrysler deal with Getrag reportedly dead
Posted Oct 19th 2008 9:31AM
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Things were just starting to look up for Chrysler's upcoming powertrains. The Phoenix V6 will hopefully return competitiveness to the engine bays of Pentastar vehicles, and a dual-clutch automated manual transmission joint venture with Getrag was nearly off the ground before both companies started shoving lawyers at each other. A joint venture plant has been built in Indiana, but the deal fell apart over money for tooling. Chrysler's shot a lawsuit at Getrag, alleging that the transmission specialist hasn't ponied up for tooling and equipment to build the gearboxes. For its part, Getrag contends that it had backing from German banks provided that Chrysler put the $300 million needed into escrow, and is prepared to sue Chrysler to get reimbursed for its investment plus damages. If Getrag and Chrysler can't come to terms, it doesn't look good for the future of Chrysler's clever gearbox which would offer increased performance and fuel economy. Chrysler's statement after the jump



Statement in Response: Chrysler v Getrag

Auburn Hills, Mich., Oct 8, 2008 - On October 7, after months of negotiations, Chrysler filed a lawsuit in Oakland County Court charging that Getrag and its U.S. subsidiary Getrag Transmission Manufacturing LLC misrepresented its ability - and failed to use good faith efforts - to secure financing to support the joint development of a manufacturing plant in Tipton, Indiana, to build dual clutch transmissions, which would be purchased principally by Chrysler for use in its vehicles, in breach of their agreements with Chrysler.
Getrag was obligated under these agreements to obtain debt financing. Contrary to Getrag's representations to Chrysler, Getrag knew that it could not obtain debt financing within the required time frame, and also knew that unless Chrysler was willing to assume significant additional obligations, debt financing could not be obtained at all. Getrag also failed to use good faith efforts to secure the financing. Despite this conduct, Getrag expects Chrysler to reimburse costs Getrag has incurred in connection with the project.

Chrysler brings this civil action to recover all damages it has sustained as a result of defendants' wrongful conduct and to obtain a judgment declaring that it has no obligation to reimburse defendants' costs related to the Tipton plant.

Chrysler is evaluating its range of possible options to meet its needs for fuel efficient transmissions in future products.

Well, if Chrysler's side is true, then I don't believe Getrag has any right expecting to reimbursed for their own failure, and furthermore, Chrysler should get to use the transmission regardless.