Wednesday, June 17, 2009
Decision Expected in Republic vs. American Axle Case
A northeast Ohio steelmaker could be forced to continue supplying troubled customer
WKSU's M.L. Schultze reports
The economic times have hit the steel and auto industries hard, and that’s the crux of a more than $2 million dispute between Northeast Ohio-based Republic Engineered Steel and a Michigan company that makes truck parts.
Republic is a specialty steel maker with operations in Canton and Lorain. One of its big customers has been American Axle and Manufacturing. Two of American Axle’s biggest customers are General Motors and Chrysler.
Republic terminated its long-term contract with American Axle and cut the company off in late May. In court filings, it says American Axle was running some $2 million behind in payments. And, Republic says that isn’t likely to get better because American Axle’s biggest customers are in bankruptcy. Republic says it offered to continue to supply American Axle, but at higher prices.
American Axle maintains in its filings that Republic is just using the auto industry collapse to get higher prices, and it wants a Michigan judge to issue an injunction to force Republic to keep shipping at the old prices.
Republic says it cannot comment on the case before the judge rules and American Axle did not return a call for comment. At one hearing in the case, the Michigan judge says he expects a flood of such cases as the auto supply chain is squeezed from both ends.
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