Stellantis and Ford have filed lawsuits against an Iowa dealership for double-financing 81 vehicles. This followed a layoff at the dealership, during which 76 workers lost their jobs.
According to a report by Carscoops, the Sky Auto Mall group was allegedly selling vehicles through floorplan fraud, which has now attracted lawsuits from Stellantis Financial and Ford Credit. The former claims that the company owes it $1.4 million, while $1.2 million is outstanding to the latter.
The company’s franchises deal in Stellantis vehicles, such as Chrysler, Jeep, and Dodge, as well as Ford and Chevrolet. Ford Credit filed its lawsuit on March 5, claiming that the Newhall store owes it more than $6.6 million.
Ford got a tip-off from Stellantis in February about the double financing activity, which prompted Ford Credit to compare lists of floor-planned new and used vehicles. The findings revealed that a total of 81 vehicles were financed by Stellantis Financial and Ford Credit.
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The filing states that the dealership acknowledged the existence of the double-flooring, backed by records that show double financing, and included alleged cover-up attempts.
Stellantis filed the lawsuit on March 2 in the Linn County District Court, alleging that the Center Point dealership had defaulted on a floor plan from November 2023, including on the advance amount paid for the inventory.
The dealership then allegedly financed the same vehicles through another lender, which continued for several months. Despite the dealership’s dwindling financial position, Stellantis kept issuing advances during that duration. It is now claiming $12.3 million in damages.
According to Stellantis, the vehicles were shifted between different dealerships to finance cars twice, meaning dealerships received the advance payments twice. To conceal its wrongdoings, the group maintained two sets of books to show that there was only one lender with floorplan rights.
Stellantis Denies Bonus to Workers
In other recent news, Stellantis posted a $26.3 billion net loss last year, which meant company-wide bonuses tied to the previous year’s performance will not be handed out this year. However, some divisional and individual bonuses are set to be paid at the end of March.
MotorBiscuit reported that the United Auto Workers (UAW) has been left furious after Stellantis allegedly handed out bonuses to management employees, but denied a bonus paycheck to the workers.
Profit-sharing with unionized workers is dependent on adjusted operating income. This didn’t go down well with the workers. UAW vice president Rich Boyer said:
“The UAW, as well as I personally, am disgusted that we were just informed that management employees will be receiving a bonus check while Stellantis UAW members did not receive a profit-sharing check.
“Our members help drive this company’s success each and every year, and they deserve to share in its success.”
