Chrysler Group LLC (Chrysler)1 issued new general terms and conditions (Terms) for production and Mopar purchasing that will apply to all purchase orders issued after December 1, 2014. The new Terms are not retroactive and apply only to the NAFTA region. The Terms include 41 provisions and reflect significant changes from prior iterations, especially with respect to identifying additional compliance and administrative obligations for suppliers.
Suppliers to Chrysler will need to understand the implications of the various changes to their business and consider strategic responses to the new Terms Chrysler now seeks to impose.
Many of these new provisions contain terms that could be subject to varying interpretations, and therefore place the onus on the suppliers to obtain written clarification on application in the event of doubt.
Foley prepared the following chart to assist suppliers in navigating the changes. The chart identifies the most significant provisions and changes and their implications. The chart also sets forth preliminary recommendations and strategies for suppliers to successfully navigate these changes.
Foley has significant experience representing automotive suppliers and sub-suppliers with myriad issues, such as contract negotiations, supply chain management and pricing issues, and dispute resolution. Foley also has extensive expertise in drafting, negotiating and enforcing favorable terms on behalf of its supplier clients.
Foley can review and update suppliers' own standard terms and conditions of purchase to assist in protecting the suppliers' interests by helping to align those terms and conditions with the Terms from Chrysler and other OEMs. Additionally, Foley can assist suppliers with consultation and preparation of other supply chain documentation to reduce the risk exposure faced by suppliers. Sales, compliance, and procurement training regarding these changes is essential.
Materials
Charting Your Way Through Chrysler Group LLC's New Terms and Conditions
Footnote
1. Chrysler Group LLC changed its name to FCA US LLC on December 16, 2014.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.