A temporary restraining order requiring Ispat Inland Inc. to continue supplying steel to Whirlpool Corp. expired Wednesday, but the company has agreed to continue following its terms for at least another two weeks.
The appliance maker filed suit against Ispat Inland on May 20 in the Circuit Court of Berrien County, Mich., claiming the surcharges the steel producer imposed on the products it supplies to Whirlpool is a violation of their current one-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,” 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 East Chicago-based 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, on Thursday. A hearing on the case had been set for Wednesday but 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 Allen declined to discuss the specific amount of steel it provides to the company or how long they 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, who 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,” Allen said.
Whirlpool North America is headquartered in Benton Harbor. It is the nation’s top manufacturer and marketer of appliances with 2003 sales of $7.9 billion and an operating profit of $810 million. It has about 31,000 employees working at its 10 U.S. locations.
Ispat Inland, the country’s sixth largest integrated steelmaker, employs about 6,000 workers at its East Chicago mill. The company is a subsidiary of London-based Ispat International N.V.