Microchip shortage hits Jeep Grand Cherokee production in Detroit
Employees in Detroit producing Jeep's most popular vehicle are facing temporary layoffs resulting from the global semiconductor shortage that's expected to last for months, the company confirmed Thursday.
Jefferson North Assembly Plant produces the Jeep Grand Cherokee and Dodge Durango SUVs. The plant typically operates on 10-hour shifts with three crews six days a week. Starting Monday, only one crew will work for three weeks, and then it will be laid off while the other two crews work for the next three weeks, according to a schedule obtained by The Detroit News.
"Stellantis continues to work closely with our suppliers to mitigate the manufacturing impacts caused by the various supply chain issues facing our industry," Stellantis spokeswoman Jodi Tinson said in a statement. "Due to the unprecedented global microchip shortage, Jefferson North will adjust its production schedule through the end of May as we continue to build our award winning Jeep Grand Cherokee and Dodge Durango."
Jefferson employs about 4,800 hourly workers and 240 salaried workers. Stellantis sold more than 55,000 Grand Cherokees in the first quarter, up 10% year-over-year, and more than 20,500 Durangos, up 15%, in the United States. It's scheduled to launch the next-generation Grand Cherokee in the third quarter.
The reduction is another major blow to Stellantis' production as it grapples with supply constraints and rising COVID-19 cases among employees in places like Michigan, which is leading the nation in new cases per capita. It is expanding the deployment of vaccinations to employees and their families at union halls starting Friday.
Four of Stellantis' North American plants remain idled through the end of April, and dealers are experiencing low inventories. Warren Truck Assembly Plant has paused the building of Ram 1500 Classic pickup trucks, while production of Chrysler minivans in Windsor, Ontario; the Jeep Cherokee in Belvidere, Illinois; and the Jeep Compass in Toluca, Mexico, also has halted.
And more supply squabbles could be on the horizon for Jefferson North after a federal judge in Detroit last week denied an injunction request from a Stellantis supplier, Shelby Township-based JVIS USA LLC.
JVIS had asked that NXP Semiconductors Inc. be ordered to provide its suppliers with the microchips needed to make control boards. Those boards then connect to JVIS's interior plastics with the buttons and knobs controlling a vehicle's heating and air conditioning systems, radio and other functions. The company had warned that without the injunction, it would have to halt production this past Monday, potentially idling Jefferson North in early May.
"We are monitoring the situation," Stellantis spokeswoman Kaileen Connelly said in a statement about the JVIS decision. "At this time, we do not expect an impact on our operations."
Stellantis, of course, is not alone in the challenges posed by the semiconductor shortage. AlixPartners LLP, a global consulting firm, has estimated that if the current trend continues, the auto industry could lose $61 billion and up to 2.5 million vehicles of production this year. Ford on Wednesday announced extended downtime at plants in Flat Rock, Chicago and Kansas City, Missouri.