Cyberattack Creates Chaos: Car Dealerships Play Musical Chairs

Cyberattack Creates Chaos: Car Dealerships Play Musical Chairs

4 minute read
Published: 7/1/2024

CDK Global's cyberattack-induced coma has thrown 15,000 North American car dealerships into manual labor mode for nearly two weeks, jeopardizing June sales and risking nearly $944 million in losses.

With CDK Global's systems still on life support, dealerships are clinging to the 1980s, manually logging sales and tracking deliveries by hand. The cyberattack has crippled essential services like Customer Relationship Management and payroll, leaving dealerships grappling with unhappy customers and frazzled employees. Despite extended customer service hours and a phased recovery, many fear this blast-from-the-past workflow could stall business and slice 100,000 vehicle sales from June’s forecasts.

For the past two weeks, car dealerships across North America have been thrust into a time warp, forced to operate without their usual digital conveniences. CDK Global, a major provider of software services to car dealerships, suffered a cyberattack that impacted around 15,000 dealerships. With digital systems down, dealerships find themselves knee-deep in manual processes, scrambling to maintain some semblance of normalcy.

The phased recovery process initiated by CDK Global isn’t moving fast enough for many. While some dealerships are starting to regain access to certain services, crucial systems like Customer Relationship Management and Service solutions remain in disarray. This piecemeal approach, though necessary, feels like trying to solve a jigsaw puzzle underwater to many of the beleaguered dealerships.

As if dealing with an influx of increasingly frustrated customers wasn't enough, dealers are now juggling the added tasks of manually tracking parts deliveries and painstakingly writing out paperwork. For those more accustomed to the rapid inputs and outputs of a fully digital system, it's a rude reawakening to a slower, more prone-to-error era.

"It's like moving from driving a sports car to a horse-drawn cart," commented one dealership employee who preferred to remain anonymous. With delays in order tracking and customer interactions becoming the norm, many employees are anxious not only about their job security but also about their paychecks.

The havoc is not limited to internal chaos. According to the Anderson Economic Group, CDK's system collapse could result in approximately $944 million in direct losses due to business interruptions if the outage lasts a full three weeks. This projection factors in lost sales and the broader ramifications of disrupted operations—because who wouldn't want to turn off their entire business for a mini-vacation?

Most strikingly, the attack could slash June vehicle sales by about 100,000 units—over 7% compared to the same month the previous year. It’s hard for dealerships to sell cars when customers are bombarded with service delays and there are mountains of paperwork to plow through.

CDK Global’s assurance of extended customer service hours has only partially mollified the dealership community. The extended hours are intended to provide support for those navigating the tumult of the recovery process, but many feel they're just treading water amidst the chaos.

"What we need are solutions, not sympathy," grumbled another affected dealer. Despite the extended hours, the bottleneck created by manual processes has left many to wonder how long they can sustain under such strain. "At this rate, we'll be back to using carrier pigeons for communication," one dealer quipped, trying to add a bit of humor to an otherwise serious situation.

Several dealerships have resorted to nostalgic methods to stay operational. Instances of workers backtracking to methods such as noting down customer orders on paper and using physical ledgers to keep a tab on parts deliveries have become alarmingly common. It's almost as if they're time-traveling back to the '90s, but without the grunge music. Despite these efforts to inch forward, concerns about long-term impacts remain.

It’s not just the immediate financial toll that’s worrisome; it’s the ripple effect on job security and operations down the line. Employees across these dealerships are concerned about their future, fearing that the financial impacts and diminished sales could lead to layoffs or reductions in work hours. It's enough to make anyone want to update their resume or take an extra-long coffee break just to cope.

As we inch towards the third week of this digital stone age, the affected dealerships are left with no choice but to hope that CDK Global’s phased recovery plan accelerates. Until the systems are fully operational, the paper jams and manual logging are here to stay, leaving the industry in a precarious balancing act between sticking to the old ways and moving forward.