“A key defense that you have under the law is the force majeure concept, or the commercial impracticability, that if something happens that’s unforeseeable at the time of the contract, you’re excused from your performance,” Jorissen told Automotive News. “That’s been huge with this global semiconductor crisis.
“There have been force majeure and commercial impracticability letters going all up and down the supply chain,” he continued. “But the inclusion of that little provision says you’re not going to get those defenses anymore. No matter what happens, you are going to be responsible.”
It’s among a number of changes Stellantis has made to its global and North America terms that have made some suppliers wonder whether they should sign a new contract with the automaker. The terms apply to all direct material request for quotations issued by Stellantis as of Jan. 1, nearly a year after the company was formed by the merger of Fiat Chrysler Automobiles and PSA Group of France.
Stellantis declined to comment this week.
Jorissen said the suppliers he has spoken with are trying to push back on many of the changes in the hopes of continuing to do business under the previous terms or at least finding some middle ground. Stellantis altered the direct materials global terms and conditions that are common to suppliers in all regions, and an addendum called Exhibit A that covers North American suppliers.
On top of the foreseeable events rule, the new terms make suppliers responsible for all capacity constraints they experience.
“The pairing of those two provisions is you’re liable for every part that comes through the supply chain, and nothing that happens in the world is going to excuse your performance,” Jorissen said. “That’s a big one-two punch, especially in today’s climate.”