Waukesha-based manufacturer Husco Internationalis facing a civil lawsuit filed by Canadian automotive manufacturer Stackpole International following an alleged contract dispute that Stackpole claims has led the company to shut down production at one of its facilities.
According to the lawsuit filed Wednesday in U.S. District Court, Husco supplies Stackpole with three “critical parts” that Stackpole then incorporates into the assembly of several vehicles for customers including General Motors and Stellantis. Those parts eventually end up in the engines of vehicles including the Jeep Wrangler, the Chevy Malibu, the Dodge Charger and more.
The complaint explains Husco supplies Stackpole with automotive parts as they are needed, so neither Stackpole nor any of Husco’s other customers have large inventories on hand. Because of this, a delay in parts could lead to production shutdowns.
“This enormous potential harm is exactly what Husco was trying to leverage when it abruptly stopped supply to Stackpole last week, on Dec. 8, 2022, in violation of Husco’s contractual obligations,” according to the complaint.
Following this alleged supply disruption, Stackpole proceeded to “lawfully terminate” its agreement with Husco for that program in 2022 without issue, reads the complaint.
After the termination of the agreement, Stackpole alleges a dispute arose over the amount Husco was due in termination damages, according to the complaint. Husco allegedly demanded immediate payment of $1.5 million. Stackpole responded by agreeing to pay that amount if Husco agreed to an audit, however, Husco allegedly declined this request.
“And when Stackpole insisted (on the audit), Husco took the drastic and impermissible step of stopping its supply under three, unrelated contracts unless Stackpole waived its audit right and immediately paid Husco $1.5 million,” according to the complaint.
Stackpole claims it had to shut down one of its production facilities on Dec. 14 due to the alleged disruption to the supply chain. The company is seeking a temporary restraining order and preliminary injunction requiring Husco to resume and continue providing its supply subject to its contracts with Stackpole. The company is also seeking an unspecified amount in monetary damages.
According to the lawsuit, Stackpole acted against Husco “to prevent the imminent and irreparable harm that will flow from shutdowns of large portions of the automotive supply chain.”
Husco declined to comment on the pending litigation Thursday.