Stellantis has initiated another legal action against a spare parts supplier, Quebec-based Spectra Premium Mobility Solutions. The dispute concerns the prices of fuel tanks for the Chrysler Pacifica minivan. Earlier this month, the automotive group led by CEO Carlos Tavares sued Spectra Premium after the supplier threatened to halt shipments of fuel tanks for the plug-in hybrid minivan. This action could have disrupted production at the Windsor assembly plant, as indicated in the lawsuit filed in the Oakland County District Court.
Stellantis sues another supplier that retroactively increased prices
Stellantis stated that its supplier demanded a 12.5% price increase retroactive to January 1 or would withhold parts. The company was set to run out of fuel tanks last week, which would have halted production. An Oakland County judge denied the automaker’s request for a temporary restraining order that would have forced the supplier to continue shipping parts at the contract price.
Stellantis warned of potentially devastating consequences, including potential staff reductions and significant financial damages, due to production disruptions related to supplier disputes. However, the company has avoided long-term interruptions by obtaining court injunctions or paying suppliers despite ongoing disputes.
The legal action against Spectra represents the fourth known legal battle Stellantis has initiated against its suppliers this year. Price disputes are common in the auto industry, but it is rare for a customer to sue a supplier. The lasting tensions between Stellantis and its suppliers have emerged more sharply and evidently in recent months, with the automotive group continuing to seek cost cuts and suppliers facing significant pressure to reduce their production costs.
“The economic consequences of a cascading interruption of this magnitude in the automotive industry are enormous and immeasurable,” the lawsuit states. But Judge Victoria Valentine denied the restraining order against Spectra, departing from her previous rulings on the other two supplier lawsuits that passed through her docket. In the case against Yanfeng, which involved millions of dollars allegedly lost in a cyber attack, Valentine granted an injunction to Stellantis. The same happened with Kamax when Valentine‘s order forced it to continue sending parts to the automaker.
The decision represents a blow to Stellantis, as the automotive company has been forced to turn to the court to protect itself from suppliers’ demands for better pricing conditions. Stellantis has argued that its suppliers are legally bound by the contractual terms, despite current economic difficulties. On the other hand, suppliers’ lawyers have maintained that supply agreements do not constitute enforceable contractual obligations.