A legal battle between Stellantis and one of its transmission parts suppliers that led to a temporary shutdown of Kokomo transmission plants earlier this year has moved to federal court.

Stellantis and MacLean-Goff Component Solutions, a Chicago-based automotive supplier of transmission gear and pinions, are now fighting in federal court in regard to a dispute over costs by the two companies.

According to court documents, MacLean-Goff told Stellantis on March 5 it would stop shipping parts after March 19 unless Stellantis agreed to pay the supplier an approximately 26% increase above its contract prices retroactive to Jan. 1, 2024.

MacLean-Goff followed through, halting shipments after the tow companies failed to resolve the issue after “multiple rounds of communications.”

The transmission gears and pinions are “crucial,” according to Stellantis, to the auto manufacturer’s operations at the Kokomo Transmission Plant and Indiana Transmission Plant. The plants make transmissions for the Dodge Ram 1500, Charger and Durango; Jeep Wrangler and Grand Cherokee; Chrysler Pacifica; and other vehicles.

The auto company said in court filings it would take 18-24 months for them to find another supplier.

As a result, according to Stellantis, production at the two Kokomo plants were temporarily halted during the week of March 25, putting thousands temporarily out of work and costing the company $3.7 million.

MacLean-Goff refused to resume shipments unless Stellantis paid a lump sum payment of $1.4 million, which the auto company agreed to do, according to court documents. However, lawyers with MacLean-Goff said it never received the payment.

Instead, Stellantis filed a civil lawsuit in Michigan, arguing the auto parts supplier was breaching its contract, and asked the judge to issue a preliminary injunction against the supplier to force it to continue shipping parts.

Oakland County, Michigan, Judge Michael Warren denied Stellantis’ request. However, the judge did say Stellantis “demonstrated it is more likely to prevail on merits.”

The auto company, according to news publication Crain’s Detroit, paid the supplier $100,000 “under hostage threat” to avoid plant shutdowns while the fate of the lawsuit is pending.

In May, the court case was transferred from a local Michigan court to the U.S. District Court Eastern District of Michigan.

A week later, MacLean-Goff filed a motion to dismiss. A hearing on the motion is scheduled for Aug. 8 in federal court in Michigan.

MacLean-Goff has argued in court that it and other suppliers have taken most of the brunt of the inflationary increase in cost of materials.

Stellantis and its lawyers have argued that MacClean-Goff can’t simply renege on contracts.