Foley & Lardner LLP Partners Nicholas Ellis and Vanessa Miller are quoted in the Automotive News article, “Stellantis’ course change not a total victory for suppliers,” which looks at Stellantis’ reversal of changes to terms for North America that it imposed on suppliers earlier this year.
Stellantis removed a new rule requiring North American suppliers to immediately pass on cost savings to Stellantis, as well as its ability to extend a supplier’s contract unilaterally; however, suppliers should be aware of the global changes that remain.
The global terms say that suppliers will have to guarantee that products are accurately labeled with their place of origin. Ellis commented that, “To the extent the supplier is getting materials from down the supply chain, it’s going to officially impose the burdens on the suppliers to do their due diligence and ensure the accuracy of materials that they are getting from their subsuppliers.”
Stellantis introduced the new terms as it makes the expensive transition to electric vehicles (EVs). Said Miller, “The supply base has to make a major investment in the EV platforms. That risk and those costs are going to be borne by more than just the tiered suppliers. The OEMs also have to bear some investment costs and some volumes and some risks.”