Amazon was hit with a $280 million lawsuit Tuesday after it ditched a company that made specialized structures used by the e-retail giant’s robotics division.
Vietnamese manufacturer Gilimex said Amazon forced it to produce structures called fabric pod arrays, or FPAs, during the pandemic, but immediately ended its deal in May, according to a lawsuit filed in New York Supreme Court.
According to the complaint, the company is suing Amazon for negligent misrepresentation, unfair trade practices, breach of contract and breach of fiduciary duty.
FPAs are storage structures with small boxes or compartments for products typically used with industrial robots. Robots transport boxes to enable efficient packaging and shipping of materials to consumers.
“Gilimex has been critical to Amazon.com’s unprecedented success, including during the COVID-19 pandemic,” Mark Kasowitz, a partner at Kasowitz Benson Torres, told The Post. “Our complaint alleges that Amazon Robotics’ abusive behavior caused Gilimex to invest heavily in its factories and in inventory and raw materials that are now unprofitable.”
Amazon did not respond to a request for comment.
In 2019, Gilimex sold 518,000 FPAs to Amazon. In 2021, this number increased to 936,000, and by this year it is aimed to reach 1 million units.
According to the complaint, Gilimex devoted all of its factories to Amazon, cutting ties with other customers at the request of the Seattle-based company and dramatically increasing capacity.
Amazon promised Gilimex that the two companies were strategic partners and that Amazon would give Gillimex advance notice before terminating the relationship, the court added.
“Amazon is very efficient at getting things done … but it comes at a cost,” a person with knowledge of the business told The Post.
People close to Gilimex said the company’s 7,000 employees in Vietnam were facing “hardship”.
Gilimex tried to save the deal until Amazon refocused its efforts on textiles, the sources said. Insiders told The Post that company employees even flew to Amazon Robotics’ headquarters in North Reading, Mass., to meet with executives.
Amazon didn’t even let Gilimex’s team into the building, sources said.
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