Stellantis closes five North American plants due to chip shortage

A United Auto Worker member leaves the Fiat Chrysler Automobiles Warren Truck Plant after the first shift on May 18, 2020 in Warren, Michigan.

Gregory Shamus | fake images

The global shortage of semiconductor chips is forcing Stellantis to temporarily close five North American plants starting next week, the company confirmed Friday afternoon.

The affected plants are found in Illinois, Michigan, Mexico and two in Ontario, Canada. They build a variety of products for the company, from older Ram 1500 pickup trucks and Jeep models to minivans and Dodge and Chrysler cars. The facility, which was previously part of Fiat Chrysler, is expected to be closed from Monday through early to mid-April, according to the company.

“Stellantis continues to work closely with our suppliers to mitigate the manufacturing impacts caused by the various supply chain issues facing our industry,” the company said in an emailed statement to CNBC. A Stellantis spokeswoman declined to reveal how many production units are expected to be lost.

Semiconductors are key components used in new vehicle infotainment, power steering and braking, among other systems. Suppliers moved semiconductors away from the auto industry as several plants closed last year due to Covid.

Consulting firm AlixPartners estimates that the chip shortage will cut $ 60.6 billion in revenue from the global auto industry this year.

The shortage is affecting each automaker differently. Several manufacturers, including General Motors, Ford Motor and Chinese electric vehicle start-up Nio, also announced production cuts this week or plans to extend downtime at facilities that have already been hit by shortages.

Vehicles affected by the Stellantis production shutdowns include the Chrysler 300 sedan and Pacifica and Voyager minivans, Dodge Charger and Challenger cars, Jeep Cherokee and Compass SUVs, and the Ram 1500 Classic pickup. A newer version of the Ram 1500 remains in production at a different Michigan plant.

Stellantis is the merged automaker of Fiat Chrysler and Groupe PSA, based in France. In the US, its main brands include Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, and Ram.


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