A federal judge has dismissed Stellantis‘ lawsuit against MacLean-Fogg, an Illinois-based engine component supplier. The dispute concerned the supply of rings and pinions essential for the automotive group’s vehicle production.
Stellantis loses in court against supplier MacLean-Fogg
Stellantis had accused the supplier of deliberately withholding these components to force price increases, a move that had caused production interruptions of Chrysler, Dodge, Jeep, and Ram vehicles in several North American plants.
Judge Judith Levy of the Michigan District Court ruled in favor of MacLean-Fogg, establishing that there was no binding contract with specific quantities between the parties. According to the ruling, the agreement was based on individual orders (“release-by-release”) and not on long-term commitments as Stellantis had claimed.
To limit damages and maintain production during the dispute, the automotive group continued to pay $100,000 weekly under protest. With this unfavorable ruling, Stellantis will not be able to recover these payments, which amount to a considerable sum. The judicial decision is based on an important legal precedent from May 2024 (Higuchi vs. Autoliv case) that requires “clear and precise” quantitative terms in automotive sector supply contracts.
Despite this setback, the issue is not yet definitively closed. The Michigan Court of Appeals will review the case by the end of the year, potentially redefining the rules in manufacturer-supplier relationships. In the meantime, Stellantis has 30 days to amend its legal action or evaluate alternative strategies to resolve the dispute.