Ford files lawsuit against Dana for violation of indemnification clause

Article by Anita Panait, on August 2, 2012

Ford Motor Co. filed a legal action against supplier Dana Holding Corp.  on July 27, 2012 in Wayne County Circuit Court for its refusal to reimburse the carmaker for recalled subframes in 1999-2003 Windstar minivans. Ford alleges that Dana refused to pay the carmaker for defective subframes in the Windstars, which were recalled in 2011 in cold weather states.

According to the lawsuit, the refusal constituted a violation of a supply agreement between the companies, in which Dana had "impliedly assured indemnification." Ford recalled around 425,000 Windstars in 22 northern states in 2011 because the subframe parts in some of the minivans were vulnerable to corrosion from road salt used in winter.

Deterioration of those components had led to reduced steering control in some vehicles, thus increasing the risk of an accident. The subframe is a part of the vehicle that supports its engine, transmission, steering rack and front suspension. Legal actions between carmakers and suppliers may mirror a failing relationship between them.

 Before its collapse in 2009, Chrysler initiated legal actions against a number of suppliers over contractual disputes. The litigation partly ruined the carmaker’s reputation to suppliers, prompting the late Dan Knott, who was Chrysler Group's head of purchasing, to work hard just to regain its good standing with its supply chain. In May 2012, Knott’s work paid off, attaining its highest score ever in a yearly survey of carmakers’ relations with suppliers.

Topics: ford, lawsuit

If you liked the article, share on:


Login or Create new account to add a comment!


It wasn’t too long ago when Maserati took the wraps off what appears to be the most gorgeous concept coupe ever made. The Alfieri coupe premiered at the 2014 Geneva...
by - October 23, 2016
Many have been excited with the impending arrival of the next-generation Jeep Wrangler and the new 2019 Jeep Grand Wagoneer, which is slated to be the brand’s new range-topping model....
by - October 21, 2016
Chevrolet has taken the wraps off its new Chevrolet Colorado ZH2 at the fall meeting of the Association of the United States Army (AUSA). Tagged as the most extreme fuel-cell-powered...
by - October 21, 2016
Honda has unveiled the fifth generation of its hot-selling SUV – the 2017 Honda CR-V. The latest iteration of the CR-V should help it maintain its benchmark status in the...
by - October 21, 2016
Many are already expecting BMW to launch an ultra luxurious SUV that will serve at its new flagship by late 2018. Larger than the X5 and X6, the new X7...
by - October 21, 2016