Ford sues supplier Dana over subframes in recalled Windstars
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DETROIT -- Ford Motor Co. is suing its longtime supplier Dana Holding Corp. for refusing to compensate the automaker for recalled subframes in 1999-2003 Windstar minivans.
Dana, of Maumee, Ohio, has been a Ford supplier since the days of the Model T.
The lawsuit, filed July 27 in Wayne County Circuit Court, alleges that Dana won't pay Ford for defective subframes in the Windstars, which were recalled in 2011 in cold weather states.
Dana's refusal to pay Ford violates the companies' supply agreement, in which Dana had "impliedly assured indemnification," according to the lawsuit.
About 425,000 Windstars were recalled in 22 northern states because subframe components in some of the minivans were subject to corrosion from road salt used in winter. Deterioration of those parts had led to reduced steering control in some vehicles, increasing the risk of an accident.
The subframe supports the vehicle's engine, transmission, steering rack and front suspension.
Court litigation between automakers and suppliers is somewhat rare -- and can signal a deteriorating relationship between the companies.
Chrysler, before its bankruptcy in 2009, engaged in court litigation with a number of suppliers over contractual disputes. The late Dan Knott, named Chrysler Group's head of purchasing after the automaker's trip through bankruptcy court in 2009, had to rebuild the company's reputation with its supply chain in part because of the litigation. Knott died April 21 of cancer at age 51. In May, Chrysler recorded its highest score ever in an annual survey of automakers' relations with their suppliers.
Ford, in its lawsuit against Dana, did not say how much in damages it is seeking.
A Ford spokesman said in a statement: "Ford is asking the court to enforce the cost sharing terms of our supply agreement with Dana. Ford is seeking the recovery of costs incurred by Ford in connection with certain parts that did not meet Ford's quality standards or those of our customers."
The spokesman confirmed that Ford continues to do business with Dana while the issue is resolved.
A Dana spokesman said it is company policy not to comment on pending litigation.
Ford is being represented by Dykema Gossett, a Detroit law firm.
You can reach Adam Rubenfire at arubenfire@crain.com.
