Microchip shortage hits Jeep Grand Cherokee production in Detroit
Employees in Detroit, who make Jeep’s most popular vehicle, face layoffs due to global semiconductor shortages that are expected to last for months, the company confirmed Thursday.
Jefferson North Assembly Plant produces the Jeep Grand Cherokee and Dodge Durango SUVs. The facility normally works 10-hour shifts with three crews, six days a week. As of Monday, only one crew will work for three weeks, and then they will be laid off while the other two crews work for the next three weeks, according to a schedule received from The Detroit News.
“Stellantis continues to work closely with our suppliers to reduce the impact of various supply chain problems on our manufacturing,” Stellantis spokeswoman Jodi Tinson said in a statement. “Due to the unprecedented global microchip shortage, Jefferson North will adjust its production schedule by the end of May as we continue to build our award-winning Jeep Grand Cherokee and Dodge Durango.”
Jefferson has approximately 4,800 hourly workers and 240 employees. 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 US. The next-generation Grand Cherokee is slated to hit the market in the third quarter.
The downsizing is another major blow to Stellantis manufacturing as it grapples with supply shortages and rising COVID-19 cases among employees in countries like Michigan, which lead the country in new cases per capita. From Friday, the use of vaccinations for employees and their families in union halls will be expanded.
Four of Stellantis’ North American plants will remain idle through April and dealers are experiencing low inventory levels. The Warren Truck Assembly Plant has stopped building Ram 1500 Classic Pickup Trucks, while Windsor, Ontario, has made Chrysler minivans. the Jeep Cherokee in Belvidere, Illinois; and the jeep compass in Toluca, Mexico has also stopped.
More supply disputes could be on the horizon for Jefferson North after a federal judge in Detroit last week denied an injunction from a Stellantis supplier, JVIS USA LLC of Shelby Township.
JVIS requested that NXP Semiconductors Inc. be commissioned to provide its suppliers with the microchips required to manufacture control boards. These circuit boards are then connected to the plastic in the interior of JVIS using the buttons that control the heating and air conditioning systems, the radio and other functions of a vehicle. The company had warned that without the injunction it would have to cease production last Monday, potentially causing Jefferson North to idle in early May.
Of course, Stellantis is not alone in the challenges that arise from the shortage of semiconductors. AlixPartners LLP, a global consulting firm, has estimated the auto industry could lose $ 61 billion and up to 2.5 million vehicles in production this year if the current trend continues. Ford announced extended downtime at plants in Flat Rock, Chicago and Kansas City, Missouri, on Wednesday.