Court Preserves Detroit Transmission Housing Supply Line

A Mexican component supplier must continue to supply Detroit Diesel Corp. with housings for Detroit-branded transmissions installed on the production lines of Freightliner and Western Star trucks, a Michigan court ruled March 21.

DDC, a unit of Daimler Truck North America, on March 4 sought a preliminary injunction in the U.S. District Court for the Eastern District of Michigan, Southern Division, to compel Martinrea Honsel Mexico to continue supplying the housings. Martinrea Honsel on Feb. 10 informed DDC that it planned to halt production for and shipments to the Redford, Mich., plant where the transmissions are built. The Redford plant, which employs about 2,220 workers, supplies engines, transmissions and axles for trucks built in Oregon, North Carolina and Mexico. DTNA builds both Freightliner and Western Star trucks.

Martinrea, which operates a factory in Querétaro, Mexico, supplies 70%-75% of DDC’s transmission housings.

In its request, DDC told U.S. District Judge Jonathan Grey that failing to grant the injunction would cause it irreparable harm and that the injunction served the public interest. DDC “has a unique design and certain specifications for the transmission housings it requires,” it argued, adding that the capital investment needed to manufacture the housings is high, and there is generally no idle capacity available to produce all the transmission housings the company requires. While DDC increased production with a second transmission housing supplier, DDC said this company was running at 100% of capacity and only produces 35% to 40% of the housings needed. Plus, DDC said this company could only sustain its current pace for three to six months.

DDC further argued that shifting to a new supplier for the bulk of its transmission housings would take between 18 months to two years.

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Workers at the Detroit Diesel Corp. plant in Redford, Mich. The factory employs about 2,220 workers, supplying engines, transmissions and axles for trucks built in Oregon, North Carolina and Mexico. (Detroit Diesel)

The dispute stretches back to June 13, 2024, when DDC alleged Martinrea was breaching the companies’ contract by falling behind on its production commitments. Before Grey’s injunction ruling, DDC had secured a temporary restraining order against Martinrea that was due to expire March 22. Grey ruled that Martinrea failed to fully explain its contention that its negotiated contract price with DDC was inadequate and ruled that the Mexican company only issued the notice of halting shipments because “it does not wish to do business with a customer that is suing it.”

Absent the injunction, DDC said it would have needed to immediately lay off 100 employees and a further 900 staff within a few weeks if the dispute dragged on. Those employees, it argued, might find employment elsewhere and take with them valuable institutional knowledge. The company said a halt to shipments would also cost it hundreds of millions of dollars in lost revenue.

Martinrea said is willing to maintain its relationship with DDC if the company “agrees to a full release of all claims it has or could have brought against Martinrea,” according to court documents.

Martinrea Honsel is a unit of Canadian automotive components manufacturer Martinrea International.

Martinrea International did not respond to multiple requests for comment.

Daimler Truck North America said it does not comment on ongoing court cases.

Freightliner — which manufactures North America’s best-selling Class 8 tractor, the Cascadia, — and Western Star sold 40.8% of the new trucks bought in 2024, according to Wards Intelligence data.