Cyberattack affecting car dealerships brings chaos for sellers, buyers and workers

BySamantha Delouya CNNWire logo
Monday, July 1, 2024
Auto dealers outage has been hamstringing car dealerships for days
An ongoing cyber incident at CDK Global, whose software car dealerships use to manage everything from scheduling to records, has crippled dealerships for days now, with no clear end in sight.

As the ongoing systems outage at software provider CDK Global stretches into its second week, car dealerships are racking up millions of dollars in losses, according to a new estimate.

Workers across the US automotive industry told CNN that the software blackout, which the company said was caused by a cyberattack, has made it difficult for dealers to track customer interactions, orders and sales, hurting their ability to earn a living.

"It's going to affect payroll here," said Bernard Irvin, a salesperson at a Ford dealership in Greenville, South Carolina. "Why wouldn't I receive my normal pay? I don't really understand what this is all about."

The workers' concerns illustrate how a cyberattack,even one on something as overlooked as record-keeping and scheduling software, can cripple an entire industry.

According to an estimate by Anderson Economic Group, CDK's system collapse could result in approximately $944 million in direct losses due to business interruptions for affected car dealers if the outage lasts a full three weeks.

Piecemeal progress

The outage began last Wednesday after two cyber incidents halted the company's systems, which provide software to nearly 15,000 car dealerships across North America, according to CDK.

In a statement on Friday, the company said it was making progress in bringing some dealerships back online. Previously, the company said it did not expect the issue to be entirely resolved until July.

"We have successfully brought two small groups of dealers and one large publicly traded dealer group live on the Dealer Management System (DMS). We are also actively working to bring live additional applications - including our Customer Relationship Management (CRM) and Service solutions - and our Customer Care channels," according to a CDK spokesperson. "We understand and share the urgency for our customers to get back to business as usual, and we will continue providing updates as more information is available."

Dozens of automotive retail workers expressed concern about how the outage affected their livelihoods.

"I work at a major body shop, and it has really hurt us," one worker wrote to CNN about the outage. "I don't know how we're going to get paid."

'It's going to affect payroll'

At 71, Norm Phillips has worked as a car parts delivery driver at both a Mercedes-Benz dealership and a Honda dealership in New Jersey for more than 21 years.

Since CDK's malfunction, he hadn't been able to work at all. The dealerships had not been able to see which parts needed to be delivered.

"When I asked my boss if we were still going to be paid, he didn't answer the question," Phillips told CNN on Thursday. "I've been home for a week looking for another job."

Even if CDK resolves the issue, Phillips said he feared the possibility of another cyberattack.

"I feel like the writing is on the wall. If hackers can get into a system and take my job away, I feel like it's probably not the right job to do right now," he said. "There's no security."

Phillips wasn't alone in expressing his frustration.

"15,000 dealerships is an awful lot to have control over when you do the math," Irvin said of CDK. "It is ridiculous."

Irvin said he realized something was amiss with the CDK software he relied on to help prospective clients when a couple interested in purchasing a new Ford Bronco Sport came in to his dealership early last week.

"I couldn't do anything I normally can do," Irvin said. "I was at a complete standstill and was only able to do really basic things."

Without CDK's recordkeeping system, Irvin also said he believed his dealership cannot keep track of accurate commission payments.

"You have to make sales," said Irvin. "Otherwise, you go home and you don't eat."

Even without access to the software, business has carried on, albeit slowly.

In the end, Irvin said it took a week to get the couple who bought their Ford Bronco Sport the bill of sale, which proves ownership of their new car. All of the documents had to be written out by hand.

And after more than a week at home, Phillips' boss texted him to return to work on Friday. They planned to track some parts deliveries and check collections manually.

"I'm surprised they didn't come up with the method sooner!" Phillips wrote in an email. "It will be a new adventure."

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