According to the complaint, Pennsylvania-based Modern Industries is BorgWarner’s single supplier for turbine housing parts, which are used in turbocharger assemblies supplied to original equipment manufacturers. Under the supply agreement, BorgWarner and Modern Industries allegedly agreed to firm prices, with BorgWarner not liable for cost hikes incurred by Modern Industries unless otherwise negotiated.
BorgWarner vs Supplier: Price Hikes and Order Refusals
But in late 2022, BorgWarner said, Modern Industries began asking for price increases and minimum order quantities that weren’t contemplated by the supply contract. BorgWarner allegedly refused and, when negotiations failed, Modern Industries stopped sending shipments of the parts toward the end of 2023, causing the Arden plant to run out of inventory, the lawsuit states.
According to BorgWarner, it tried to remedy the stalemate by offering to “spot buy” certain purchase orders at the price Modern Industries requested, but the supplier refused to play ball. It wasn’t until BorgWarner filed a motion for a temporary restraining order and injunction in November 2023 that Modern Industries relented, the auto parts maker said. However, Modern Industries still hasn’t shipped the full amount of parts requested under those “spot buy” orders, BorgWarner said.
Escalation of the Dispute
Things further escalated in May when Modern Industries said it wouldn’t ship any new releases, the complaint states. BorgWarner said it demanded assurances that Modern Industries would follow through on the shipments, but Modern Industries “did not provide a substantive response for a full week.”
