Auto CEO makes bold promise after cyberattack, outage

For two weeks, auto dealerships experienced some of the worst setbacks when it came to selling and servicing cars at showrooms and service departments across the United States and Canada.

Automotive dealers and service shops using CDK Global's dealership management system software (DMS) on June 20 were sent back to using pen and paper to do much of the tasks streamlined using its software suite, as an extensive cyberattack led the company to pull systems offline.

With much of the storm behind them, CDK's CEO is making a bold promise to its customers based on what they experienced.

A customer looks at vehicles for sale at a dealership.
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CDK CEO delivers an apology

In light of the outage caused by the cyberattacks, CDK Global CEO Brian MacDonald is promising financial compensation for the losses that affected dealerships faced during the two-week period without the company's DMS software.

"We recognize the events have been challenging, and we will provide you with some financial relief," MacDonald said in a letter to 15,000 dealerships on July 11.

The CEO did not dive into any details about how much money these dealers will receive in compensation but said that the "CDK Customer Engagement Team will share further details."

MacDonald recognized that the cyberattack exposed cybersecurity-related vulnerabilities, and extended a helping hand to help the auto dealer community become more resilient in the future.

"For the industry, we are offering to any dealer — regardless of whether or not they are a CDK customer — a free tool to conduct training to better prepare for potential cyber incidents and to help dealership employees avoid common pitfalls." he wrote.

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CDK faces new lawsuits

According to a recent report, sources close to CDK told CNN that the dealership software firm paid close to $25 million in the form of Bitcoin to pay off the ransom held by the hackers that committed the cyberattacks against them.

In the letter to dealers, MacDonald thanked dealers for their "patience and partnership through the restoration process," adding that their "restoration process is coming to a close."

Additionally, the CEO said that his company has "taken steps to secure our environment and we will continue to work with top third-party security experts to constantly evolve our approach," adding that "as a market leader, CDK is well equipped to make the ongoing and necessary investments."

The statements by the CEO come as lawsuits were filed against CDK in light of the cyberattack and the subsequent outage of the company's dealer management systems software.

Illinois-based independent body shop Jay Kay Collision Center on June 25 filed a class-action lawsuit against CDK Global in the U.S. District Court for the Northern District of Illinois, claiming that the outage made it difficult for the shop and others to conduct business.

In a separate class-action lawsuit filed just five days later in the U.S. Southern District of Florida, Florida-based Formula Sports Cars and Prestige Motor Car Imports, Georgia-based Bill Holt Chevrolet of Blue Ridge and Florida residents Annie Ortiz and Alexis Pino seek to represent other dealers and auto retail employees, as they allege that the cyberattacks themselves have compromised private data and information and harmed the businesses of auto dealers and its employees.

"This negligence has led to significant breaches affecting countless individuals across the United States who have purchased or serviced a vehicle or work at any business location with their personal data stored and accessible within the CDK systems," the suit said.

"The repercussions of this failure are far-reaching, exposing sensitive information to cybercriminals and causing irreparable harm to the reputation and trust of the affected parties."

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