Judge denies injunction on chipmaker, puts Jeep Grand Cherokee production in jeopardy
A Michigan federal judge on Friday denied an injunction request by a Stellantis NV supplier, a decision that could imperil production of the popular Jeep Grand Cherokee in Detroit.
U.S. District Judge Stephanie Davis determined the global shortage of semiconductors that has caused furloughs and work stoppages at many auto plants would have made an order requiring Dutch manufacturer NXP Semiconductors NV to provide or reallocate microchips to suppliers of Shelby Township-based JVIS USA LLC unenforceable.
The decision comes just as Stellantis, the maker of Jeep SUVs and Ram trucks, on Friday said it was extending downtime at four other plants, including at Warren Truck, related to the chips shortage and other supply chain constraints.
NXP's chips are used in control boards that operate the interior plastics JVIS makes with buttons and nobs that control a vehicle's HVAC system, radio and other functions. The Texas freeze in February, the chipmaker said, cost NXP five weeks of production, and it lost or delayed 700,000 chips.
"While it might theoretically cure a work stoppage for JVIS, it will result in work stoppages potentially for others," Davis said of an injunction during a hearing on the case. "While JVIS says that these semiconductors have been diverted to others, essentially what it is asking since we know that there is a scarcity of these items that two the extent there are some available to others, JVIS says, 'No, give them to me.' Those companies undoubtedly need them just as much as JVIS does."
Without the injunction, JVIS will be unable to produce its parts on Monday to provide to Mayco Industries Inc., said Martha Olijnyk, JVIS's attorney said. That could halt production of Jeep's best-selling vehicle at Jefferson North Assembly Plant within the first 10 days of May.
"Without the ICS, the instrument panels that Mayco supplies to Stellantis will have a gaping hole in it and cannot be supplied without the assembly JVIS supplies," Olijnyk said. "Time is of the essence for these parts. There is no wiggle room for delivery."
Stellantis said Friday it would be inappropriate to comment on a pending legal matter. Meanwhile, it shared that production at Warren Truck, which makes the Ram 1500 Classic pickup truck, will be down through the end of May, though the launch of the new Grand Wagoneer SUV will not be affected.
The minivan plant in Windsor, Ontario; Jeep Cherokee plant in Belvidere, Illinois; and Jeep Compass plant in Toluca, Mexico, also will be down through the rest of April. Brampton Assembly, which makes the Dodge Challenger and Charger muscle cars and Chrysler 300 sedan, will resume production Monday, though JVIS makes parts for those vehicles, too.
"Stellantis," spokeswoman Kaileen Connelly said in a statement, "continues to work closely with our suppliers to mitigate the manufacturing impacts caused by the various supply chain issues facing our industry."
Stellantis CEO Carlos Tavares on Thursday during the company's first general shareholder meeting said visibility into the chip issue was low and expected to extend into the second half of the year. Crosstown rivals General Motors Co. and Ford Motor Co. expect hundreds of millions of dollars in losses related to the shortage.
NXP has worked to find tens of thousands of supplemental chips for JVIS and is sending the semiconductors in smaller batches than it typically does to get to them to its customers sooner, said Marc Collier, NXP's attorney.
"If we had any chips, we would give the chips. We have no chips," he said. "My client has been working around the clock to keep this country's automobile supply chain running."