Some suppliers contacted by AN said they’re studying the changes and did not want to comment. A spokesman for ZF said the transmission maker is “still reviewing these terms and working with Stellantis.”
An executive at one significant supplier to Stellantis said the updated terms and conditions make suppliers’ liability “potentially unlimited.” The executive requested anonymity due to the sensitive nature of the topic.
“Any supplier that signs up for this is basically at the stage where you cannot calculate the rate of return on your investment,” he said. “You have potentially unlimited liability on all kinds of different things, and you don’t know how much you’re going to make.”
The executive said the answer for suppliers frustrated with the changes is to not sign onto a new contract with Stellantis under the new terms and conditions.
“Either use the old T’s and C’s or not do business at all,” the executive said.
Stellantis could be at risk of losing future business from suppliers that are not dependent upon it to remain afloat financially, he said.
“We’re living in a world where we don’t have a great surplus of suppliers,” the executive said. “The suppliers that are in business are good, but they’re all challenged in terms of getting people to work, getting supplies and making a return. And the industry is trying to fill capacity. Demand is there, but we have production shortages. So, any supplier that has the ability to choose among customers is not going to do business with Stellantis.”
A former Stellantis insider with knowledge of the automaker’s North American purchasing operations said the changes are the sort of behavior that shows why Stellantis and predecessor FCA consistently receive low scores in the annual Plante Moran supplier satisfaction survey.
The person said nearly half the staff in Stellantis’ purchasing department has left over the past two years, resulting in many company veterans being replaced by inexperienced new hires chasing “unrealistic savings goals.”
Philip Nussel of
Automotive News contributed to this report.