Stellantis struggles to rebuild supplier trust despite legal win

Yahoo

20-05-2025

Attorneys representing Stellantis were in a courtroom in Detroit earlier this month, arguing a case before the Michigan Court of Appeals.
That hearing, involving the contract between the company's U.S. operating arm known as FCA US LLC and supplier Kamax, resulted in a decision that went in the automaker's favor.
While it's not unusual for automakers to deal with lawsuits, industry watchers say it is unusual for automakers and their suppliers to engage in public fights.
But it's not a new story for Stellantis, and the challenges the owner of the Jeep, Ram, Chrysler, Dodge and Fiat brands has had in dealing with its suppliers was on display again this week with the release of a supplier sentiment survey.
Automaker advertising: Ford and Stellantis address tariff turmoil with bold 'made-in-America' ad campaigns
Here again, Stellantis stood out, ranking last among the automakers surveyed in the 25th annual North American Automotive OEM-Supplier Working Relations Index Study from Plante Moran (OEM is an abbreviation used to refer to automakers as "original equipment manufacturers"). In order, from best to worst, Toyota, Honda and General Motors each saw their scores increase over last year, while Nissan, Ford and Stellantis saw their scores drop. Other automakers, including Tesla, don't participate.
The order of rankings is unchanged from last year. Stellantis, however, has had the worst score since 2021 — the same year it was formed from the merger of Fiat Chrysler Automobiles and Peugeot maker PSA Group — and going back earlier, the automaker had the worst, next-to-worst or tied-for-worst score since 2008.
This year's results also represent the largest gap since 2008 between the top automaker and the bottom one, according to Dave Andrea, principal in Plante Moran's Strategy and Automotive and Mobility Consulting Practice. The results are based on responses from 665 supplier executives from 398 Tier 1 suppliers at a time when the auto industry deals with volatility from changing market conditions and is now facing the uncertainty caused by tariffs.
The companies that do well on the survey tend to be known for better communication, responsiveness and treating their suppliers like partners.
'The top three are doing the things better that enable suppliers to better control their costs, achieve equitable cost-sharing and better navigate uncertainty,' according to Angela Johnson, a principal in Plante Moran's Management Consulting, Supplier Relations Analytics. She said suppliers aren't expecting automakers to bear all the costs.
Stellantis provided a statement through spokeswoman Jodi Tinson acknowledging that it has work to do:
"Despite increasing our engagement activities with our suppliers since Stellantis was formed, we recognize that more work is needed to continue building trust. This remains a priority for Stellantis, and we will continue exploring strategic initiatives while working with our suppliers to focus on improving where it matters most."
Regarding the Kamax suit, which stems from an Oakland County court case, the automaker said it was pleased 'a court has once again ruled that our purchase order contracts are enforceable requirements contracts. As we've stated in the past, it is never our intent to use the court system to resolve such disputes; however, certain situations unfortunately require it. Stellantis remains committed to working with our suppliers, so that we can continue to build the vehicles that our customers desire."
The recent ruling from the Michigan Court of Appeals deals with Kamax's effort in 2023 and 2024 to push the automaker to renegotiate the prices it pays for automotive fasteners because, Kamax said, the costs to produce the parts had skyrocketed. Kamax later said it would stop deliveries but relented following a decision in Oakland County Circuit Court, and the case eventually made its way to the Court of Appeals.
It's one of numerous court cases involving Stellantis and its suppliers in recent years.
Detroit-based attorney Dan Rustmann, whose firm, Butzel, represents numerous suppliers, called litigation between suppliers and automakers very unusual and typically a last resort.
Rustmann, who noted that he represents 'a lot of Tier 1 suppliers,' said that 'in my experience dealing with many different carmakers … anecdotally Stellantis has been the most difficult of any of the customers that I had to deal with on behalf of my clients.'
In times of rising costs, for instance, some automakers are more willing than others to provide relief, he said.
'In my experience, Stellantis has not been so willing and that's why they're facing all this litigation and disruption from their supply chain,' he said.
Rustmann said his firm's experience aligns closely with the results of the Plante Moran survey.
Although Rustmann said he can't make a direct connection to the impact on the end product, meaning the vehicle that a consumer purchases, he said it's common sense to treat others fairly.
'When you treat a supplier poorly and beat them down and don't give them relief when they have a cost increase … you're not going to get the best (technology) from them,' he said.
Contact Eric D. Lawrence: [e-mail]. Become a subscriber. Submit a letter to the editor at freep.com/letters.
This article originally appeared on Detroit Free Press: Stellantis struggles to rebuild supplier trust despite legal win