Released on April 6, 2009

Diecaster Transcast Precision Inc., Ontario, Canada, said in a press release it plans to fight an interim court order that would force it to supply parts to several customers.

The Ontario court system delivered the order on April 3, several days after a parts shortage was reported by Chrysler, one of the companies indicated in the order. The order would force Transcast to deliver enough parts for 14 days of production to Chrysler, General Motors, Magna International Inc. and Gates Corp.

Transcast, which had remained silent in the media over the past week, said in its official statement that on March 30 it initiated contact with Chrysler to sell company assets and enter into an agreement that would permit its long-term viability. The Transcast statement concedes that its inventory would have had to be purchased above previous prices but said that the increase was required to offset transition costs, including legal bills and unpaid severance, and that it would persist for only a five-day term.

“Transcast has regrettably been portrayed by Chrysler et al as a form of corporate raider seeking to take advantage of the OEMs in the current economic maelstrom in which the automotive industry finds itself,” said Dean Topolinski, president and director of Transcast. “Transcast has had no opportunity to present its side of this story in the proceedings, which were commenced without notice to Transcast and while senior management were out of Canada.”

According to Transcast’s statement, the customers would not engage in discussions to come to a commercial solution to keep its plant open when they took Transcast to court to seek interim relief for the return of tooling and parts.

“If the North American auto industry intends to rebuild itself and emerge from our current recession, it must defend the rights of all business owners, especially the auto parts manufacturers who are being economically exploited,” Topolinski said. “We are hopeful that the courts will recognize the established pricing and negotiations tactics that exist in market, ones predisposed to the unfair treatment of smaller auto parts manufacturers and suppliers that rely on relatively few but very large customers.”

The court has ordered another proceeding within the upcoming two-week period to settle matters regarding ongoing price and supply. The Transcast statement indicated the company intends to continue to present its case and overturn this and other interim rulings.