DETROIT (Aug. 7, 2006) — A deal late last week between Goodyear and General Motors Corp. averted—at least temporarily—a stalemate that had threatened to disrupt the opening today of GM's plant in Delta Township, Mich.
GM said late Aug. 4 that Goodyear has resumed shipment of tires to the auto maker, easing fears that a simmering dispute over prices would create shortages at Delta Township and other GM plants.
In a July 31 lawsuit filed in suburban Detroit, GM sought an injunction ordering Goodyear to keep delivering tires. According to the suit, Goodyear had told GM on July 19 that it would cease work on tires for the Lambda program, the GMT900 SUV platform and commercial trucks unless terms of the contracts were changed.
The Delta Township plant, near Lansing, is scheduled to make the GMC Acadia and Saturn Outlook crossovers this year and the Buick Enclave crossover in 2007. All are built on the Lambda platform. GM also said in the suit that the dispute could force the shutdown of other plants.
GM said in its suit that Goodyear had refused to comply with the terms of its contracts unless GM met Goodyear's “unilateral demands” of higher prices for tires.
“Although GM offered to pay the increased prices under protest, to avoid the irreparable harm a shutdown of assembly plants could cause, Goodyear has not accepted those terms, forcing GM to file this action,” the suit said.
It was not clear late Aug. 4 if the agreement was merely a stopgap measure, or if agreement had been reached on key pricing issues. GM spokeswoman Deborah Silverman said production at the Delta Township plant would proceed as scheduled.
Goodyear spokesman Ed Markey confirmed Aug. 4 that the company was shipping tires to GM. He said he was not able to comment on the status of the lawsuit.
Earlier in the week, Goodyear said in a statement to Tire Business: “Goodyear believes that the complaint is unfounded and mischaracterizes the current relationship between Goodyear and General Motors.
“Goodyear is supplying tires to GM on valid contracts. This disagreement is limited in nature, and Goodyear is within its rights relating to all actions taken. We are disappointed that GM has chosen this response, and we are currently in discussions, remaining hopeful that the matter will be resolved amicably.”
In the lawsuit, GM said Goodyear was seeking higher prices from the auto maker because of increases in raw material costs. GM said the tire maker was expecting a $22.3 million increase in such costs in 2006.