Running a car company means depending on outside suppliers and contractors. No car company can make all its own components or run all its own events. Even a fledgling auto startup like Faraday Future may rely on hundreds of other companies for parts and services to put its car together. This is why you never, ever see a car company start a public fight with a contractor like Faraday Future did earlier today on Twitter.
The public facts of the drama are that the visual effects company The Mill recently sued Faraday Future for $1.8 million on a claim that the car company was not paying its bills.
The Mill’s claim is straightforward: it worked on a presentation for a product demo for Faraday Future’s new car and it didn’t get paid.
You can read the whole case above, but it’s also worth noting that The Mill is one of the top visual effects companies in the car world, and that just about every automotive publication globally loves its work. (You may know the Mill as the company responsible for The Blackbird, the shape-changing car rig that just about every website and magazine covered last year.)
That this case is coming from a visual effects company is not a great surprise; Faraday Future can operate without a visual demo for its car.
The smart thing for Faraday Future to do would be to work to resolve the pay issue as quickly and as quietly as possible. It’s what every other car company would do, and it’s what Faraday Future has done in the past with its previous cases. But it’s not what Faraday Future did here:
It’s not great to threaten to sue your own contractors. This is not how things work in this business, and if Faraday Future wants to work with the best and the brightest in the industry, tweets like this are not going to encourage anybody to work with FF. Working with bad suppliers can spell disaster for a car company; look at the Takata meltdown last year as an example.
Having no suppliers work with you is a death knell for a car company; there’s just no way to operate without them.
As one source close to the situation explained, it’s policy at Faraday Future to try to seek out top talent for the company’s contractor and supplier relationships. The goal for Faraday Future is to work with the best. Certainly the company’s hardware, its 1,050 horsepower, all-electric, semi-autonomous FF 91 car, is an impressive demonstration of this quality. But if you don’t have the money to pay this top talent, working with them only hurts you.
This is not the first time this sort of thing has happened with Faraday Future—the company has settled two other lawsuits over late bills last year including one with the supplier that made its seats and faced a very well-publicized $21 million spat with the construction company contracted to build Faraday Future’s factory in Nevada.
What does this tweet mean for Faraday Future? Taking a more aggressive public stand against its suppliers can only mean we should expect a more aggressive public stand from those suppliers in return. More hands stretched out looking to settle unpaid bills, more bad headlines and more difficulty in getting the good work of its engineers into production.