Amazon slapped with $280M lawsuit for breach of contract with robotics supplier

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Amazon was hit with a $280 million lawsuit Tuesday for allegedly abandoning a company that makes specialized structures used by the e-retail giant’s robotics division.

Vietnamese manufacturer Gilimex claims Amazon pushed it to produce the structures – called fabric pod arrays, or FPAs – during the pandemic but then promptly ended their deal in May, according to the lawsuit filed in New York Supreme Court.

The company is suing Amazon for negligent misrepresentation, unfair trade practices, breach of contract and breach of fiduciary duty, according to the complaint.

FPAs are storage structures with small bins or compartments for products that are typically used with industrial robots. The robots transport the bins to allow efficient packaging and shipment of materials to customers.

“Gilimex has been critical to Amazon.com’s unprecedented success, including during the COVID-19 pandemic,” Marc Kasowitz, partner at Kasowitz Benson Torres, told The Post. “As alleged in our complaint, Amazon Robotics’ egregious conduct caused Gilimex to invest substantially in its factories and what is now worthless inventory and raw materials.”

Amazon did not respond to a request for comment.

In 2019, Gilimex sold 518,000 FPAs to Amazon. That number ballooned to 936,000 in 2021, and by this year the goal was to make 1 million units, according to the suit.

Gilimex dramatically expanded capacity, dedicating all factories to Amazon and severing ties with other customers at the request of the Seattle-based company, according to the complaint.

Gilimex ramped up production of fabric pod arrays, or FPAs to work with Amazon.

Amazon promised Gilimex the two companies were strategic partners — and that Amazon would give Gillimex sufficient advance notice before terminating the relationship, the suit added.

“Amazon is very efficient at getting things done… but that comes at a cost,” a person with knowledge of the case told The Post. 

People close to Gilimex say the company’s 7,000 employees in Vietnam have suffered “hardship.”

Amazon
Amazon promised Gilimex the two companies would be strategic partners, according to the lawsuit.
Denver Post via Getty Images

Gilimex tried desperately to get Amazon to maintain the deal until it could refocus its efforts on textiles, according to sources. Company brass even flew to Amazon Robotics’s headquarters in North Reading, Mass., to seek a meeting with executives, insiders told The Post.

Amazon wouldn’t even let the Gilimex team into the building, sources said.

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