GM sues bankrupt supplier for access to parts
http://tinyurl.com/ax442c

General Motors Corp. is suing a bankrupt automotive supplier for
immediate access to specialized parts and equipment, arguing that a
delay would hamper the launch of its new Chevrolet Camaro, disrupt
assembly operations and cause millions of dollars in damages it can
ill afford.

In a filing with the U.S. Bankruptcy Court in Delaware on Christmas
Eve, GM accused Cadence Innovation LLC of Troy, Mich. of "holding
hostage" the parts and tooling equipment it needs and breaching the
terms of an agreement it signed with the automaker in August.

Cadence, which GM once hailed as its 2006 supplier of the year, filed
for Chapter 11 bankruptcy in August, which became a liquidation
proceeding earlier this month. The automotive supplier makes door
panels, airbag covers, consoles and other parts.

GM said it employs "just-in-time" manufacturing where parts are placed
into vehicles within hours of delivery. The automaker has on hand
parts that can support assembly operations only for several days to a
week.

GM wants immediate access to the parts and equipment so it can have a
new supplier in place and making parts by Jan. 12 to avoid a major
disruption to its assembly operations.

"Even one day's disruption in supply of certain component parts could
cause a shutdown of GM assembly operations, disrupting not only GM's
business, but the operations of countless suppliers, dealers,
customers and other stakeholders," the lawsuit said.

GM said such a shutdown would cost the company millions of dollars in
damages daily at each affected plant. The automaker accused Cadence of
refusing to adhere to their August agreement and hampering its efforts
to take possession of parts and equipment.

Cadence did not immediately return a call for comment on Friday.

Shares of GM rose 41 cents, or nearly 12.6 percent, to close at $3.66
Friday. Late Wednesday the U.S. Federal Reserve granted bank holding
status to its financing arm, GMAC Financial Services, which made GMAC
eligible for funds earmarked for the government's $700 billion bank
rescue plan and saved it from possible bankruptcy. The move came just
days after the White House threw GM and fellow Detroit automaker
Chrysler LLC a $17.4 billion emergency lifeline.