Cyberattack disrupts car dealerships, causing chaos for sellers, buyers, and employees
As the software outage at CDK Global extends into its second week, car dealerships are experiencing millions of dollars in losses, according to a new estimate.
Workers across the US automotive industry reported to CNN that the software blackout, caused by a cyberattack, has hindered dealers’ ability to track customer interactions, orders, and sales, impacting their earnings.
“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 highlight how a cyberattack on something as seemingly minor as record-keeping and scheduling software can cripple an entire industry.
According to 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 three weeks.
Piecemeal progress
The outage began last Wednesday after two cyber incidents disrupted 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, CDK stated it did not expect the issue to be fully 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 told CNN. “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 could not 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. “I’ve been home for a week looking for another job.”
Even if CDK resolves the issue, Phillips said he feared 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 his frustration.
“15,000 dealerships is an awful lot to have control over when you do the math,” Irvin said about CDK. “It is ridiculous.”
Irvin said he noticed something was wrong with the CDK software he relied on to help clients when a couple interested in purchasing a new Ford Bronco Sport came into 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 believed his dealership couldn’t track accurate commission payments.
“You have to make sales,” said Irvin. “Otherwise, you go home and you don’t eat.”
Despite the software outage, business has continued, 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 documents had to be written out by hand.
After more than a week at home, Phillips’ boss texted him to return to work on Friday. They planned to manually track some parts deliveries and check collections.
“I’m surprised they didn’t come up with the method sooner!” Phillips wrote in an email. “It will be a new adventure.”