Chip Shortage Forces Furloughs at Transmission Plants
Inside the Stellantis plant in Tipton. (photo courtesy: Kokomo Tribune)
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowAbout 1,000 workers at transmission plants in Kokomo and Tipton have been placed on furlough as the company feels the continued effects of a worldwide shortage of microchips.
The Kokomo Tribune reports operations at Stellantis have been limited to day shifts, cutting production in half for 9-speed transmissions.
Stellantis is the result of the merger of Fiat Chrysler Automobiles and Peugeot.
Shortage of the chips, also known as semiconductors, has been a result of the pandemic. The insufficient global supply has impacted auto, tech, biotech and consumer electronics industries. Demand spiked for devices for smartphones and gaming consoles while people sheltered at home during the pandemic.
The chips control nearly all electronic systems in a vehicle.
“They’re having a hard time getting them and keeping the assembly plants running,” said Matt Jarvis, president of United Auto Workers Local 685, which represents the plants in Kokomo and Tipton.
The publication says the transmissions are used in the compact crossover SUV Jeep Compass, which is assembled in Mexico.
Jarvis says production of the 8-speed transmission is still occurring at the local facilities. He says those transmissions are used in the Jeep Wrangler and Dodge Ram, which is seeing strong sales.
“They’re concentrating on building the high-profit vehicles,” he said. “Our sales are still really good on those vehicles, so they’re still trying to produce those and get them out to the dealerships.”
Jarvis says the local furloughs are set to end on May 3 but could be extended.
Click here to read the full report from the Kokomo Tribune.