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Detroit construction company sues former Chrysler partner

| Oct 16, 2013 | Contract Disputes |

Detroit-based Walbridge Construction is seeking $118.5 million in compensation for work on a halted construction project in Indiana. The company was contracted by Getrag Transmission, a German manufacturing company, to build an 800,000-square-foot factory, but when Getrag and its former partner Chrysler went bankrupt, the project went south.

The case reminds us of the risks attached to major interstate construction projects, as well as the far-reaching effects of troubles in the automotive industry. Chrysler has since come out of bankruptcy and has plans to fund completion of the Indiana factory, but Walbridge is looking for Getrag to make good on a promise of payment.

The German company asked an appeals court to dismiss a lawsuit filed by Walbridge, but the court decided not to hear the appeal. Now the case will go to trial or the parties will enter into settlement negotiations.

The planned transmission factory had a price tag of $530 million, but in 2008 the project was halted. For its part, Walbridge says the job would have provided income to subcontractors from Michigan, Indiana and Ohio. Walbridge asserts that Getrag’s actions led to more than $118 million in losses.

Getrag sought to have the dispute handled in Germany, arguing that the company shouldn’t have to pay for company officials to show up in Indiana to testify. That request clearly wasn’t granted.

Some good news is that Chrysler announced earlier this year that 850 workers are expected to be hired when the auto factory is completed.

As for Walbridge and Getrag, Michigan residents with bankruptcy and business litigation concerns may want to follow this case as it moves ahead.

Source: Miami Herald, “$120M lawsuit over Indiana factory moves ahead,” Oct. 14, 2013