UPDATE 2-GM gets deal with supplier CCM, says plant shutdown threat averted

Wed Jul 13, 2016 6:47pm EDT
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(Adds background and detail on supplier, GM)

By Paul Lienert

DETROIT, July 13 (Reuters) - General Motors Co told a U.S. bankruptcy court on Wednesday that it reached a deal with an insolvent Massachusetts parts supplier whose struggles had threatened to shut down some or all of GM's North American plants.

After the hearing, GM spokesman Nick Richards said the automaker already had identified replacement suppliers for the parts and "did not anticipate any disruption" in production.

The judge in the case, heard in the U.S. Bankruptcy Court in Worcester, Massachusetts, ruled on Wednesday that GM could retrieve tooling and finished parts from the supplier, Clark-Cutler-McDermott.

CCM, a 105-year-old supplier of acoustical materials based in Franklin, Massachusetts, was the sole supplier of insulation and other sound-deadening materials to GM, the automaker said in an earlier court filing.

GM had argued CCM's failure could cause "catastrophic disruption" across the U.S. auto industry, costing it tens of millions of dollars in lost production and potentially throwing "tens of thousands" of employees at GM plants and other GM suppliers out of work.

CCM had been a GM supplier for nearly 50 years. GM in turn was responsible for 80 percent of CCM's business.

CCM's attorneys had argued that the company would lose $30,000 a day if forced to continue making parts for GM. GM said it had been funding CCM's losses since March.   Continued...