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A temporary restraining order requiring Ispat Inland Inc. (East Chicago, IL, U.S.) to continue supplying steel to Whirlpool Corp. (Benton Harbor, MI, U.S.) expired last week, but the steel supplier has agreed to continue following its terms for at least another 2 weeks.
The appliance maker filed suit against Ispat Inland on May 20, 2004 in the Circuit Court of Berrien County, MI, U.S., claiming the surcharges the steel producer imposed on the products it supplies to Whirlpool is a violation of their current 1-year purchase agreement.
Tom Kline, spokesman for Whirlpool, said his company believes Ispat Inland violated the contract because it was "applying surcharges outside the scope of the contract." Whirlpool is seeking "further conjunctive relief," Mr. Kline said, but declined to elaborate on the matter.
At the initial court hearing in May, Whirlpool requested and received a restraining order that prevented Ispat Inland from unilaterally imposing previously announced or new surcharges on the steel it supplied to the company. The order also required Ispat Inland to continue providing the company with the specific types of steel it uses to manufacture clothes washers, dryers, and dishwashers.
Ispat Inland has agreed "to maintain the status quo," said David Allen, spokesman for Ispat Inland.
A hearing on the case had been set for June 2, but it was postponed until June 16 when the judge will hear arguments on the matter, he said.
Ispat Inland is a major steel supplier to Whirlpool, but Mr. Allen declined to discuss the specific amount of steel it provides to the company or how long the companies have maintained a contract relationship. "It's substantial," he said. "We've done business with them for many years."
The situation is being closely watched by other steel users and by other steelmakers, which have imposed similar surcharges on their contract customers as well on those buying their commodity steel.
"Everyone would like their prices as low as possible," Mr. Allen said. (Munster Times)
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