Details Emerge About ITW Price Dispute
Details Emerge About ITW Price Dispute
Jason Sandefur
Details have emerged about the customer lawsuit filed against Illinois Tool Works over a price dispute related to fasteners.
Milwaukee-based Johnson Controls Inc. sued to enforce its contract after ITW insisted on a price increase related to soaring steel costs.
ITW reportedly threatened to stop shipment of screws, bolts and other fastener products unless it was granted a price increase to help with surging steel prices. The price of steel reportedly has doubled during the first six months of 2008.
ITW reportedly continues to supply Johnson Controls, though the price dispute has been building for months, court documents revealed.
Johnson Controls wants the courts to force ITW to continue to supply parts under the terms of a fixed-price agreement. Johnson Controls conceded in the suit that purchase agreements have occasionally been revised, but the company said it has never allowed a supplier to unilaterally raise prices, especially the “substantial” increases the company said ITW is seeking.
Johnson Controls corporate communications director Monica Levy declined comment on the suit, telling FastenerNews.com the company’s “policy is that we don’t comment on pending litigation.”
ITW responded in court documents by claiming the price change was authorized by the contract.
Johnson Controls claimed that a halt in shipments would disrupt production at “numerous plants around the country owned by GM, Ford, Chrysler, Nissan, Toyota, Mercedes, and Honda.”
ITW supplies Johnson Controls with fasteners representing “multiple millions of dollars in annual business,” according to court documents.
Analysts say the suit is an indication of how soaring steel prices are roiling the auto industry. Web: itw.com �2008 FastenerNews.com
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