An Aug. 4 deal between Goodyear and General Motors Corp. averted-at least temporarily-a stalemate over original equipment tire shipments that had threatened to disrupt the Aug. 7 opening of GM's plant in Delta Township, Mich.
It's unclear if the deal will nullify a lawsuit filed by the auto maker, in which GM said Goodyear had stopped shipment of tires over a price dispute in violation of the companies' contract. The case remains open though no court dates were set by Tire Business' Aug. 10 presstime, according to the court's docket.
GM said late Aug. 4 that Goodyear has resumed shipment of tires to the auto maker, easing fears that the dispute would create shortages at Delta Township and other GM plants. Goodyear supplies more than 8 million tires annually to GM.
In a July 31 lawsuit filed in suburban Detroit, GM sought an injunction against Goodyear to compel the tire maker to supply products to GM pending resolution of the dispute. GM also sought an order to continue working under the existing contracts for their entire terms as well as unspecified damages, legal fees and other costs.
According to the suit, Goodyear 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, Mich., 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. GM claimed in the court documents that its contract with Goodyear does not allow the tire maker to refuse to perform its supply duties or demand price increases. GM said in the suit that it later offered to pay the increased prices under protest while ``preserving its legal rights,'' but Goodyear did not accept that offer.
It was not clear if the agreement was merely a stopgap measure or if an 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.
The lawsuit was filed in Macomb County Circuit Court in Michigan. GM's global purchasing and supply chain unit is in Warren, in Macomb County.
Crain News Service contributed to this report.