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A Better Partnership


Nov 2014
November 03, 2014

Tom Manganello offers suppliers advice on protecting against recalls in Crain's Detroit Business

With the massive wave of auto recalls over the past year, Tom Manganello offers suppliers timely and sound advice in this week’s Crain’s Detroit Business

Manganello, co-chair of the firm’s Automotive Industry Group and legal counsel to the CEO council of the 450-member Original Equipment Suppliers Association, said that the “obligation to reimburse an automaker for recall costs can literally bankrupt a supplier overnight.”  

According to Manganello, a key challenge for suppliers is the limited opportunity to test and validate their components within the larger automotive system where the part ultimately needs to perform.  It’s often “a combination of parts and the way they interact that causes an eventual vehicle failure,” said Manganello.

Manganello advises that suppliers “carefully negotiate limitations of liability based upon attribution of fault as determined by a joint root cause analysis of the entire vehicle system.  Suppliers should try to avoid agreeing to language that turns them into an insurer rather than a parts manufacturer.”

Crain’s Detroit Business subscribers can read the full story Here

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