Chinese supplier Yanfeng was hit with a cyberattack last November that temporarily shut down three Jeep and Ram assembly plants in metro Detroit and one in Mexico.
A cyberattack against automotive supplier Yanfeng late last year cost automaker Stellantis NV more than $26 million in damages and shut down production of Ram and Jeep vehicles at three assembly plants in metro Detroit and one in Mexico, according to a lawsuit.
After the automaker charged the damage to Yanfeng’s account, the Shanghai-based supplier of instrument panels, door panels and center consoles protested and stopped shipments before a court order in January forced it to resume.
All told, the automaker lost more than $300 million in revenue because it was unable to manufacture 6,000 vehicles without parts from Yanfeng, according to the lawsuit filed against the supplier by FCA, the former name of Stellantis, in Oakland County Circuit Court.
Stellantis makes its North American home base in Auburn Hills, Mich.
The dispute is one of three cases working through Michigan’s Sixth Judicial Court involving complaints initiated by Stellantis against parts makers based in Michigan and Illinois. In recent weeks, the suppliers stopped shipping components in protest over costs, resulting in plant shutdowns and millions of dollars in losses for the maker of Ram, Jeep, Dodge and Chrysler brands.
The Yanfeng case details the fallout from a November ransomware attack, claimed by hacker group Qilin, that temporarily halted operations at the supplier, whose North American base is in Novi.
Yanfeng has not responded to requests for comment, and its Rochester, Mich.-based attorney Martha Olijnyk declined comment this week on behalf of the company. Attorneys for Stellantis did not respond to requests for comment. Crain's also requested comment from Stellantis.
The company did say in a statement to Crain’s earlier this week that it would take the “necessary steps to protect our company, employees, suppliers, dealers, communities and customers,” and that it was “extremely disappointed” to file lawsuits as a “last resort.”
While the Yanfeng lawsuit shines a light on the impact of the data breach, it is also another example of Stellantis' deteriorating relationship with parts makers.
That relationship has frayed in the wake of the merger between Fiat Chrysler Automobiles and Peugeot SA and reached a tipping point after Stellantis told hundreds of supplier executives and industry insiders at a town hall in February that it would no longer accept claims for cost increases, Crain’s reported April 15.
Parts are continuing to flow to assembly and transmission plants through temporary restraining orders on Yanfeng and Kamax, a Lapeer, MIch.-based manufacturer of fasteners. Stellantis is paying in dispute another supplier, MacLean-Fogg Component Solutions LLC, to keep parts moving to its Kokomo transmission plants until a judge decides whether to approve a request for a restraining order.
A few days after the Nov. 11 cyberattack on Yanfeng, Stellantis demanded the supplier pay for the damages, but Yanfeng balked and argued “force majeure,” claiming the incident was beyond its control and therefore not its responsibility, according to the lawsuit.
The attack shut down Stellantis plants Nov. 11-14 and Nov. 28-29, causing more than a dozen “certified line disruptions,” the lawsuit states. The damages included:
In mid-December, Yanfeng threatened to stop shipping parts and terminate its contracts with Stellantis because of the $26 million charge. Then, on Jan. 12, 16 and 17, it stopped shipping parts to the automaker at various times.
“Immediate injunctive relief is necessary not just to prevent irreparable harm to FCA but also to avoid widespread disruption and catastrophic harm across the automotive industry if Yanfeng abandons its obligations under the parties’ contracts,” according to the lawsuit, filed by Birmingham-based attorney Stephen King.
Judge Victoria Valentine issued a court order Jan. 30 forcing Yanfeng to continue delivering parts.
The supplier countersued Stellantis, seeking damages of its own and dismissal of claims for damages to Stellantis. Yanfeng asked the judge for “damages arising from FCA’s practice of systemically ordering components and effectively canceling its orders last minute including labor, storage, scrap and raw material costs unnecessarily incurred by Yanfeng.”
Last week, Yanfeng’s lawyer also filed a motion for summary dismissal of the lawsuit against Yanfeng Mexico, one of several affiliate entities named in the case.
A date for pretrial was set for Aug. 15, if the sides fail to settle their dispute by then.
Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]