Stellantis Sues Brose in Latest Supplier Price Dispute

Stellantis has taken legal action against Brose, a German automotive parts supplier, over alleged unfair price increases. The lawsuit marks Stellantis’s fifth court case against a supplier this year, as the automaker tackles rising costs and supply chain challenges across the industry. Stellantis claims Brose’s pricing changes have disrupted operations at its Windsor Assembly Plant, and the company seeks a court order to enforce the supplier’s contract obligations.

Background on the Dispute with Brose –

Brose, one of the world’s largest family-owned automotive parts suppliers, serves a variety of clients within the automotive sector. It supplies components to Stellantis for production at its Windsor Assembly Plant, where Stellantis says the supplier’s decision to hike prices has impacted production continuity. According to Stellantis, Brose’s actions have led to costly production pauses, forcing Stellantis to agree temporarily to the increased prices while disputing them.

The company notes that negotiations with Brose last November initially appeared to result in an agreement, but Brose allegedly reneged on this arrangement. Stellantis now argues that Brose’s actions have escalated to the point where intervention is necessary to ensure the consistent operation of its production plants.

Statements from Both Companies – 

Brose has declined to comment specifically on the lawsuit but acknowledges that industry challenges have strained relationships across the automotive supply chain. In a recent statement, Brose commented: “We do not comment on pending litigation. However, we recognize that the volatility in the automotive industry has significantly impacted relationships between the supply base and OEMs. Our main goal is to protect our business and employees. We remain hopeful for a resolution that allows our partnership to continue.”

Stellantis’s Growing Legal Battles in 2024 – 

This lawsuit represents the latest in a series of legal actions Stellantis has taken against suppliers over price increases in 2024. As the company pushes back on what it views as unjustified cost hikes, the automotive industry faces significant volatility. Stellantis sued four other suppliers earlier this year, alleging similar pricing disputes. The legal actions underscore Stellantis’s stance on holding suppliers accountable to pre-agreed terms, especially when price changes are introduced unexpectedly.

Additionally, Stellantis’s legal activities have extended beyond supplier disputes. In August, the automaker filed a separate lawsuit against a dealership attempting to return unsold fleet vehicles, collectively valued at $180 million. Around the same time, Stellantis faced a shareholder lawsuit over declining profits, highlighting the pressures the company faces on multiple fronts.

What’s Next? – 

Stellantis continues to undergo significant change as it addresses leadership shifts and large-scale brand transformations. While Brose and Stellantis seek to resolve this current dispute, how Stellantis will navigate its broader challenges with suppliers remains. Industry experts speculate that the case’s outcome could set a precedent for Stellantis’s future dealings with its supplier network and its approach to managing cost controls.

As the legal proceedings unfold, Stellantis remains focused on stabilizing production, ensuring continuity, and protecting its bottom line during a challenging time for the entire automotive industry.

Source: Automotive News