Transmission supplier Getrag has filed for bankruptcy protection on one of its US plants after automaker Chrysler reneged on an agreement to source new transmissions from the German brand.

The fallout from the US auto industry's current turmoil is beginning to manifest itself in other areas. Getrag Transmission Manufacturing has filed for bankruptcy protection for one of its US plants after its main customer pulled out of their deal. The German company says Chrysler has reneged on an agreement to buy dual-clutch transmissions from it, which were going to be assembled at the Tipton, Ind, plant. The facility cost USD530 million and was being built for the sole purpose of manufacturing these transmissions. Other Getrag businesses are not affected.

Now, as with many other similar stories, the two companies are going after each other in the best way any American knows how; the court system. Getrag filed a lawsuit against Chrysler at the end of October 2008 to claim for reimbursement for all expenses connected to the plant that it absorbed, including those related to Getrag's own suppliers.

This is a countersuit since Chrysler had previously sued Getrag, saying the company had not properly represented its ability to find financing for building the plant in the first place. Chrysler is looking at getting out of possibly reimbursing these costs by seeking damages of "wrongful conduct."


GETRAG files for Chapter 11 bankruptcy protection