Chrysler Group LLC. filed a lawsuit against its former parent Daimler AG (DAI) in a federal court in New York, charging it with having failed to honor supply contracts for parts essential for the production of key 2010 Chrysler vehicles.

Chrysler claimed that it would have to halt production of its 2010 model-year vehicles, Dodge Challenger, Charger, Chrysler 300 and Jeep Grand Cherokee models at its plants in Brampton, Ontario and Jefferson North in Detroit due to the disruption in the supply of components including steering columns and torque converters. The company will also have to idle workers and cease related orders from other suppliers.

The German automaker, Daimler believes that Chrysler’s claims have no merit. Daimler is willing to resolve the issues with Chrysler on new and modified supply agreements.

In 2007, Daimler had sold the wholly-owned Chrysler to a private equity firm Cerberus Capital Management, retaining a 20% stake. However,

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Asia is poised to become the “new” Detroit.

Here in the United States, at a cost of a mere $3 billion, the “Cash-for-Clunkers” program appears to have given new hope to the U.S. auto industry.

But that new hope is destined to be short-lived.

It’s true that - in terms of value delivered for the money invested - “Cash for Clunkers” has eclipsed every other stimulus program that has been tried. But the program has a projected lifespan of only three months, meaning it can’t reverse the powerful global forces that are destined to turn the U.S. auto market from leader to laggard on the global stage.

Financial Crisis Fallout Reshapes Sector

Thanks to the financial crisis whose impact continues to be felt, worldwide automobile demand had dropped on an overall basis since 2008.

But regional differences are already emerging.

In the United States, for instance, the benchmark seasonally adjusted annual sales rate (SAAR)

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Top financial officials from the Group of Eight (G8) industrialized nations on Friday issued an upbeat evaluation of the global financial crisis, describing signs that markets were stabilizing around the world and warning that it was necessary to devise “exit strategies” to disengage from stimulus programs that have been put in place.

The G8 met for two days in Lecce, Italy. Eight world finance ministers – including U.S. Treasury Secretary Timothy F. Geithner, and his global counterparts from Britain, Canada, France, Germany, Italy, Japan and Russia – also agreed to create “a set of common principles and standards governing the conduct of international business and finance,”The Washington Post reported.

In a communiqué called “the Lecce Framework” – which described the strategy for obtaining those goals – the finance ministers called on government leaders to fill in the regulatory gaps that led to the global financial crisis, including

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GM Cans Mid-Size Trucks; Treasury Yields Soar to 7-month High; Airlines Grounded by $9 Billion Loss; Copper Sinks as Dollar Rises; Supreme Court Delays Chrysler Sale; McDonald’s misses estimates; Apple debuts new iPhone

After repeated attempts to sell its medium-duty truck operations,General Motors Corp. (OTC: GMGQ), yesterday (Monday) said that it would halt their production by July 31. Reuters reported. “After four years of working with multiple potential buyers, General Motors has decided to wind down its medium-duty truck operations,” the automaker said in a statement.  GM plans to cease production of Chevrolet Kodiak and GMC Topkick. The automaker sold about 20,000 of the vehicles last year, down from roughly 30,000 in 2007, as the U.S. economy sank into a deep recession. Yields on two-year treasuries soared to the highest level since November, as investors expressed concern that record issuance of U.S. debt may overwhelm demand ...

If history is our guide, then the rally we’ve seen in U.S. stocks in recent weeks is more than just a periodic run-up in share prices – it’s the initial stage of a prolonged bull market.

The 13-week rally the Dow Jones Industrial Average has experienced off its March lows is the most powerful surge that index has seen since the Great Depression. If we look to history, stocks should continue to rally over the next three months.

“I say this with the utmost confidence and my fingers tightly crossed: This is the start of a new bull run,” Hugh Johnson, chairman of Johnson Illington Advisors, told MarketWatch.com.

The 13-week stretch from March 9 through May 29, which saw the Dow soar 28.3%, has been bested only once – by the 40.8% run-up the Dow enjoyed in the 13 weeks that followed its hitting a bottom in May 1932. The

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The competition to buy General Motors Corp.’s (NYSE: GM) Opel and Vauxhall units heated up last Friday as the three primary suitors were reportedly joined by an unidentified Chinese automaker.

Meanwhile, a bankruptcy filing is not certain in the GM restructuring case, and reports that the Obama administration will steer the automaker into bankruptcy as early as this week are premature, Reuters reported on Friday, citing a source familiar with the situation.

Negotiations will likely continue right up to the May 31 deadline, the source said, with the Chrysler LLC case - where the process continued until the deadline - serving as a good comparison.

Magna International Inc. (NYSE: MGA) appeared to gain the early edge Friday in the race to buy Opel, surpassing rival bidders Fiat S.p.A. (OTC: FIATY) and RHJ International Inc. (PINK: RHJIF).

German officials said they were

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Crude Rises Above $62/Barrel; Opel Courtship Down to Three; Unibanco CEO: 4% Second-Half GDP for Brazil; Target and BJ’s Beat Expectations; Obama To Sign Credit Card “Bill of Rights”; California Could Go Broke After Voters Reject Plan; Wall Street Won’t Rehire Many Workers; Indiana Pension Funds File to Block Chrysler Bankruptcy Sale

Crude oil yesterday (Wednesday) rose above $62 a barrel, a six-month high, after the U.S. government released a report that showed inventories fell below forecasts. “The big drops in both crude and gasoline are very bullish,” Nauman Barakat, senior vice president of energy at Macquarie Futures USA Inc., told Bloomberg. “If people were surprised by how fast crude oil moved from $50 to $60, they will be really shocked by how quickly the market will hit $70.”...

Agricultural Bank of China Raises $7.3 Billion; Banks Applying to Repay TARP; Fiat CEO Confident About Opel Bid; World Bank Prez Sees Year-End Recovery; Derivatives Shrink to $592 Trillion; GE Reaches Debt Funding Goals for 2009; UAW & GM Still at Odds on Labor Agreement; Home Depot Beats Street

Agricultural Bank of China raised 50 billion yuan ($7.3 billion) in the nation’s biggest corporate bond sale. The goal of the bond sale was to raise capital and help set up an initial public offering, Bloomberg reported. A handful of banks have applied to repay the billions they borrowed from the U.S. government’s Troubled Asset Relief Program (TARP). Sources told Reuters that Goldman Sachs Group Inc. (NYSE: GS) and Morgan Stanley (NYSE: MS) are two of the banks eager to ...

HONG KONG SPECIAL ADMINISTRATIVE REGION, People’s Republic of China – As deep as the U.S. auto industry’s financial crisis seems to be, there may actually be a fairly simple solution. Sell out to China. Nearly a decade ago, I warned that Detroit’s Big Three – General Motors Corp. [GM: 1.09, -0.06 (-5.22%)], Ford Motor Co. [F: 5.49, +0.33 (+6.40%)]and Chrysler LLC – had better learn to speak Chinese if they wanted to survive. I’ve repeated that warning many times since. Now, it appears that the idea is finally entering mainstream thought. China may well be Detroit’s lifeline. From some – chiefly those who don’t understand that Detroit has largely failed to make a passing grade in an increasingly global economy – my warnings have attracted a lot of criticism. That’s unfortunate, because by

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As deep as the U.S. auto industry’s financial crisis seems to be, there may actually be a fairly simple solution. Sell out to China. Nearly a decade ago, I warned that Detroit’s Big Three – General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F) and Chrysler LLC – had better learn to speak Chinese if they wanted to survive.

I’ve repeated that warning many times since. Now, it appears that the idea is finally entering mainstream thought. China may well be Detroit’s lifeline. From some – chiefly those who don’t understand that Detroit has largely failed to make a passing grade in an increasingly global economy – my warnings have attracted a lot of criticism.

That’s unfortunate, because by adopting such a defensive posture, these critics have missed the real point I was making: Chinese companies would initially have no interest in taking

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