Home Business Stellantis closing five North American plants due to chip shortage

Stellantis closing five North American plants due to chip shortage

by Sakuragun Chan

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

Gregory Shamus | Getty Images

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

The impacted plants are in Illinois, Michigan, Mexico and two in Ontario, Canada. They build an array of products for the company – from older Ram 1500 pickup trucks and Jeep models to minivans and Dodge and Chrysler cars. The facilities, formerly part of Fiat Chrysler, are expected to be closed from Monday through early- or 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 spokeswoman for Stellantis declined to disclose how many units of production are expected to be lost.

Semiconductors are key components used in the infotainment, power steering and braking of new vehicles, among other systems. Suppliers directed semiconductors away from the automotive industry as multiple plants shut down last year due to Covid.

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

The shortage is impacting every automaker differently. Several manufacturers, including General Motors, Ford Motor and Chinese EV start-up Nio, this week also announced production cuts or plans to extend downtime at facilities that have already been impacted by the shortage.

Stellantis is the merged automaker of Fiat Chrysler and France-based Groupe PSA. In the U.S., its core brands include Alfa Romeo, Chrysler, Dodge, Fiat, Jeep and Ram.

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