Stellantis Closes Five North American Plants Due To Chip Shortage

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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 | Getty Images
A global semiconductor chip shortage is forcing Stellantis to temporarily shut down five North American factories starting next week, the company confirmed on Friday afternoon.
Affected factories are in Illinois, Michigan, Mexico and two in Ontario, Canada. They build a line of products for the company – from older Ram 1500 pickups and Jeep models to minivans and Dodge and Chrysler cars. The facilities, which were previously part of Fiat Chrysler, are expected to be closed from Monday to early or mid-April, according to the company.

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

Semiconductors are key components used in infotainment, power steering and braking in new vehicles, among other systems. Suppliers have moved semiconductors away from the auto industry as several factories closed last year due to Covid.
Consulting firm AlixPartners estimates that the chip shortage will reduce the global auto industry’s $ 60.6 billion revenue this year.

The shortage has a different impact on each automaker. Several manufacturers, including General Motors, Ford Motor and Chinese start-up Nio, also this week announced production cuts or plans to extend downtime at facilities already affected.

Vehicles affected by 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 A newer version of the Ram 1500 remains in production at another plant in Michigan.

Stellantis is the amalgamated automobile manufacturer of Fiat Chrysler and the PSA Group based in France. In the United States, its main brands include Alfa Romeo, Chrysler, Dodge, Fiat, Jeep and Ram.

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