Stellantis closes 5 North American crops resulting from chip shortages

A member of United Auto Worker 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 shortage of semiconductor chips is forcing Stellantis to temporarily close five North American plants starting next week, the company confirmed on Friday afternoon.

The affected plants are in Illinois, Michigan, Mexico and two in Ontario, Canada. They build a range of products for the company – from older Ram 1500 pickup trucks and Jeep models to minivans and Dodge and Chrysler cars. The facilities, which used to belong to 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 reduce the manufacturing impact caused by the various supply chain problems in our industry,” the company said in a statement emailed to CNBC. A Stellantis spokeswoman declined to indicate how many production units are likely to be lost.

Semiconductors are, among other things, key components for infotainment, power steering and brakes in new vehicles. Suppliers have moved semiconductors away from the automotive industry as several plants were closed due to Covid in the past year.

Consulting firm AlixPartners estimates the chip shortage will reduce global auto industry sales by $ 60.6 billion this year.

The deficiency affects every automaker differently. Several manufacturers, including General Motors, Ford Motor and the Chinese EV start-up Nio, also announced production cuts or plans to extend downtime at facilities already affected this week.

Vehicles affected by Stellantis’ production stops include the Chrysler 300 sedan, as well as the Pacifica and Voyager minivans, Dodge Charger and Challenger vehicles, Jeep Cherokee and Compass SUVs, and the Ram 1500 Classic pickup. A newer version of the Ram 1500 continues to be produced at a different facility in Michigan.

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