Axiom received bid requests again but the company found it was no longer winning any new contracts.

The company worked on further cost-cutting efforts to try and satisfy Intier. The company discovered in 2002 that it could reduce its costs for resins — the primary raw material in plastic parts — by changing suppliers.

Axiom said its new supplier met Intier's specifications for the use of Dupont brand resins. However, Intier informed Axiom that it had to buy from Dupont Canada or a registered distributor.

In his affidavit for the injunction, Di Serio said Intier officials told him that if Axiom did not buy from the more expensive distributors, it would no longer get any bidding requests.

"The unfairness of this was obvious and appalling," Di Serio said. "We only looked for and found our less expensive supplier after being told by Intier that we absolutely had to cut our costs wherever and how ever possible. Now they were preventing us from doing so."

Axiom ignored Intier's ultimatum on bidding opportunities. It kept buying from the new supplier and saving money.

The company also discovered Intier had another reason for wanting suppliers to buy from Dupont Canada and recognized distributors. It had a rebate agreement with Dupont for the purchase of resins by its suppliers.

Intier "clearly told me, in no uncertain terms, that Axiom not buying materials from Dupont Canada was costing Intier money," Di Serio said in the affidavit. "At that time, Intier claimed to have lost $134,000 (U.S.)."

In its defence, Intier acknowledged the rebate program with Dupont and added they are common in the auto industry. Company policy called for the purchase of resin from an "authorized" Dupont representative.

Intier added it doesn't prevent suppliers from negotiating lower costs with authorized suppliers.

In its dispute, Intier noted Dupont could not ensure Axiom was buying the company's resins from an authorized source based on information it had received.

In response, Intier demanded money covering lost rebate money; Axiom's resumption of purchasing from Dupont distributors and disclosure of the new supplier. Axiom refused.

It said Intier started deducting the value of the rebate money from funds owed the company for production. When Axiom indicated it would no longer ship production and threatened legal action, Intier finally paid the money for deliveries, Di Serio said.

Meanwhile in Italy, Axiom's foray had turned into a disaster. Intier withdrew its major contract in January 2003, less than a year after Axiom opened operations there.

In 2003, Intier had also started requesting competitive bid quotes from all its suppliers. Harris acknowledged Intier didn't contact Axiom for bid requests but he didn't necessarily expect it in view of the firm's responses to cost issues.

Axiom received a further shock when Intier informed the company in July 2003 that it wanted a minimum of 20 per cent in price reductions on existing contracts during the next 18 months, including 10 per cent before the end of the year.

Intier warned in a letter that if Axiom did not meet the targets, it would expect "full co-operation" in moving existing parts contracts to other suppliers.

Intier added Axiom had fallen "significantly short" of Windo-Motion's overall "givebacks" to auto makers. The letter did not provide financial details on the demands from any auto makers, although DaimlerChrysler had confirmed publicly it had sought cuts.

Axiom president and co-owner Perry Rizzo said the company reminded Intier that it had already provided millions of dollars in cost savings through innovations and problem-solving that also helped the auto-parts giant win other contracts from vehicle manufacturers.

At the same time, Axiom appealed for help from its own suppliers in efforts to offer some cuts. The company received a cool response.

Rizzo, a former Windo-Motion manager, said his firm had no room to manoeuvre and he did not understand how Intier could legally terminate a contract solely because the seller didn't lower prices.

But Harris said Intier viewed Axiom's cost-reduction efforts as "shallow and insufficient." In February last year, Intier sent the letter to Axiom requesting the huge immediate price cut. "We require an immediate 31.8 per cent price reduction on all the components you supply to us," Harris said in the letter to Di Serio. "While providing this reduction is not a guarantee of long-term business, it does begin to address what is currently an uncompetitive situation. In addition, we need you to pursue additional opportunities to further reduce cost and improve product performance." Rizzo said in a recent interview that Intier's demands for deep cost cuts were "outrageous" and the company knew Axiom could not comply because details about profit potential was in contract bid forms.

Axiom said in its court filings that it estimated profit of 4 to 6 per cent on remaining contracts with Intier.

"If we had that kind of profit to make a 31 per cent cut, we wouldn't be here," Rizzo added. "We would be on a beach."

Harris acknowledged during cross-examination on Axiom's application for the injunction that Intier did not make the same 31 per cent demand to all suppliers.

However, he said Intier asked other suppliers for various cuts and they made price concessions during their existing contracts.

Axiom responded with a give-and-take proposal. The company proposed a 0.5 per cent reduction on existing contracts for every $1 million of new business.

It also offered a 2 per cent annual reduction on new work.

Intier responded by giving notice on Oct.1 that it would terminate all Axiom's contracts at the end of the year. Axiom estimates those deals are worth about $8 million annually.

Intier sought new suppliers for the work but Axiom says it never received an opportunity to bid on them again. Regardless, competitors already had the inside track, according to Axiom.

For example, a Chinese company will be able to purchase resins from cheaper suppliers under its Intier contract. A Canadian rival is getting tooling from Intier that will increase operating efficiencies significantly for another contract, Axiom says.

Intier has acknowledged those claims by Axiom.

The new suppliers will also receive Axiom's tooling on those contracts. That means they won't have to bear Axiom's original design, launch and testing costs.

Intier said it expects to save about $1.7 million this year by moving current Axiom contracts to other suppliers and $2.7 million over the lifetime of the agreements.

Di Serio said he believes Axiom's refusal to sever ties with its new resin provider prompted Intier to punish his company and arbitrarily cut it off as a supplier.

Harris denied Di Serio's claim and said Intier made the move to meet global demands from the auto makers and remain successful.

"For a substantial period, Axiom has been unwilling or unable to work with Windo-Motion to reduce its prices to a level satisfactory to Windo-Motion," he said.

But Di Serio said, despite the tough market conditions, Intier's fortunes have soared since Magna spun it off as a publicly traded company a few years ago.

Intier's profits jumped to $84.2 million in the first nine months of last year, more than double the earnings for the same period in 2003.

The three Axiom partners said, regardless of the outcome of the injunction and lawsuit, the relationship with Intier that grew for more than a decade is dead.

"For me, this has been a nightmare," Di Serio said.