GRAND RAPIDS — Tier 1 automotive supplier Gill Corp. has settled a lawsuit with Ann Arbor-based Benteler Automotive Corp. about payments Gill was demanding as it prepared to close its Bond Avenue production plant in Grand Rapids.
The request was “a normal course of action when automotive manufacturing facilities consolidate operations or shut down a facility — as Gill is doing at the Bond Ave. site,” Gill President and CEO David DeGraaf said in a statement about the settlement emailed to MiBiz.
The company aims to close the plant by April 2020.
The production in question stems from contracts with the former GR Spring & Stamping Inc., which Gill acquired in 2014.
In the lawsuit, Benteler alleged Gill was demanding “ransom” from its customers as it dealt with serious financial problems. Last month, Gill told Benteler that it was insolvent, had entered into a short-term forbearance agreement with its lender and was in the process of selling off its plants and operations, as MiBiz previously reported.
The effects of the situation could have had “catastrophic consequences” on the automotive supply chain for plaintiff Benteler and its customers, which include Ford, Fiat Chrysler and Toyota, according to the lawsuit.
Benteler relies on a “just in time” delivery system that depends on frequent shipments of parts, according to the filing. The company maintains just a two-day supply of critical components.
Fortunately, the two parties settled the dispute without disruption to automakers, Yves Ostrowski, head of communications and marketing at Benteler, told MiBiz after confirming news of the settlement.
“We have kept the deliveries to our customers in time and in quality and we are in close communication with our customers to this end,” Ostrowski said. “To keep a stable supply chain to our customers is one of our key priorities.”