Stellantis pays $100,000 to supplier to prevent factory closures in Indiana

Stellantis recently prevented factory closures by paying a supplier $100,000. The supplier, MacLean-Fogg Component Solutions LLC, had threatened to cease shipping pinions and gears to two of Stellantis’ plants in Kokomo, Indiana. These plants produce transmissions for various Stellantis vehicles, including the Ram 1500, Wrangler, Grand Cherokee, Charger, Durango, and Pacifica. 

The supplier and Stellantis had been in a cost dispute, which resulted in the supplier stopping the parts supply. This forced Stellantis to shut down its transmission plants, leading to damages of $3.7 million. To resolve the issue, Stellantis agreed to pay MacLean-Fogg $1.4 million to keep the plants running despite their protest. 

However, the supplier claimed they never received the payment and refused to end the shutdown. In response, Stellantis filed a lawsuit against MacLean-Fogg, requesting a court order to halt the delivery of parts. 

Stellantis’ frustration over the situation was evident, as they highlighted the fragile nature of the automotive supply chain and the legal battles that arise from supplier disputes. The disputes have been exacerbated by Stellantis’ refusal to adjust contract prices despite suppliers facing increased costs due to inflation and supply chain issues. This has led to suppliers arguing that they are entitled to renegotiate prices under the pressures of the current economic environment. 

Despite granting “billions” in accommodations, Stellantis insists on the importance of honoring contracts to prevent suppliers from using the threat of plant shutdowns as leverage for price increases. This indicates significant tension between maintaining operational stability and adapting to economic challenges.