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Cyberattack cripples U.S. auto dealerships' operations

By Allen Cone
Dealersbhips deal with hacking. WDIV.
1 of 2 | Dealersbhips deal with hacking. WDIV.

June 22 (UPI) -- Thousands of car dealers in the United States are struggling to handle virtually all areas of their business, including sales and services, because their software vendor was hacked this week.

CDK Global, a company that provides auto dealerships software for managing sales and other services, was shut down for a third straight day Friday after cyberattacks crippled the platform.

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Bloomberg reported a group claiming to have hacked the system is demanding tens of millions of dollars, and the company intends to pay the amount but discussions are subject to change. A Bloomberg source said the hack is believed to be based in eastern Europe.

Roughly 15,000 car dealers depend on CDK's dealer management software to run their businesses. That includes payroll, inventory, customer relations and office operations. Dealers also line up with financing and insurance with the system.

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The computer system includes agreements involving rebates and incentives.

WDIV business editor Rod Meloni said "they're flying blind."

CDK has not indicated when its systems will be back up and running. But it could take days, according to PC Mag.

"We are actively investigating a cyber incident," a CDK spokesperson told CBS News. "Out of an abundance of caution and concern for our customers, we have shut down most of our systems and are working diligently to get everything up and running as quickly as possible."

Dealerships on Reddit are sharing that they were relying on spreadsheets and sticky notes to sell customers small parts and make repairs, but no large transactions are being done.

Jeff Ramsey, an executive with Ourisman Auto Group headquartered in Maryland, told CNN the shutdown could cost his dealerships some business. Customers could just find a dealer nearby that's not having these issues and buy a new vehicle there, instead.

"My selling team can hand-write a buyer's order," Brian Benstock, general manager of Paragon Honda and Paragon Acura in Long Island City, New York, told CNN.

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Ford is providing assistance to its dealers, including Lincoln.

"Although there is an industry-wide system outage for some dealers who use CDK, Ford and Lincoln customers are able to receive sales and service support due to alternative processes available to our dealers," the company said.

Vehicle repair/mainteenance servucs also are affected.

Tom Maoli, whose dealerships are based out of New Jersey, told Fox Business, his group "has to do everything manually," including putting together the repair order "so they can pay it."

"And then what happens is, when there's parts that need to be used to repair the vehicle, there's an inventory system within CDK and those parts are not being deducted from our systems so when we use parts out of our inventory, alerts won't automatically go to the manufacturers to replenish us with those parts," he said, "They're not getting those alerts so the entire supply chain system is being shut down."

Brookfield Business Partners, a Toronto-based private equity firm, acquired the company in 2022 for more than $8 billion.

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