Stellantis must continue to pay its supplier MacLean-Fogg to receive transmission parts in the United States
- Judge Michael Warren ruled that Stellantis must pay its supplier to continue receiving transmission parts.
- Supplier MacLean-Fogg stopped producing Stellantis gearboxes in March after a dispute over parts prices.
- Stellantis is embroiled in three legal battles with suppliers in the U.S. to keep costs down.
Stellantis’ attempt to force one of its suppliers to continue supplying parts while a dispute over price plays out in court has been rejected. The automaker is now vulnerable to factory closures.
Stellantis’ lawsuit is against MacLean-Fogg, which makes gears and pinions that are supplied to the automaker’s factories in Kokomo, Indiana. The facilities produce transmissions for the Ram 1500, Jeep Wrangler, Jeep Grand Cherokee, Dodge Charger, Dodge Durango and Chrysler Pacifica.
Read: Stellantis fights against suppliers, leading to factory closures and lawsuits
In March, Stellantis agreed to pay MacLean-Fogg $1.4 million in protest after the supplier withheld shipments and halted production in Kokomo, Crain’s reports. But MacLean-Fogg’s lawyers said the automaker didn’t pay.
Instead, Stellantis sued the supplier and sought a court order to prevent the delivery of parts. The automaker argues that MacLean-Fogg has subjected it to a “hostage situation” and that the impact could be “catastrophic” if parts are not delivered. This results in equipment shutdowns that can result in hundreds of millions of dollars in losses.
However, Judge Michael Warren did not find Stellantis’ logic convincing. He decided that the car manufacturer MacLean-Fogg must continue to pay under protest.
“This cascade will only occur if [Stellantis] refused to pay under protest,” Judge Warren wrote in his opinion. “Much like a citizen who has the key to her own prison cell, [Stellantis] can prevent this impending economic catastrophe by paying in protest.”
It’s not all bad news for Stellantis, however. In his opinion, the judge concluded that the automaker “has demonstrated that it is more likely to prevail on the merits” and that it can recover damages from MacLean-Fogg if it prevails in its lawsuit.
Stellantis is in the middle of three legal battles with suppliers after announcing earlier this year that it would not negotiate prices with the companies that make parts for its vehicles.
