Detroit Jeep Plant Faces Temporary Layoffs on Chip Shortage

Stellantis NV is planning to temporarily lay off workers at a Jeep plant in Detroit during April and May due to a shortage of semiconductor chips, the company confirmed.

Stellantis will cut two work crews at its Jefferson North plant in Detroit for three weeks starting April 26, then call them back and lay off a third crew from May 17 through the week of May 31, according to a schedule obtained by Bloomberg News. The plant on Detroit’s east side normally operates two shifts with three work crews six days a week to keep it running 20 hours a day.

“Stellantis continues to work closely with our suppliers to mitigate the manufacturing impacts caused by the various supply chain issues facing our industry,” company 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.”

The plant, known as JNAP, employs about 4,800 hourly workers and makes the Jeep Grand Cherokee, the top-selling Jeep model last year, and the Dodge Durango SUV. A redesigned version of the Grand Cherokee is scheduled to start production in August, according to researcher AutoForecast Solutions.

Stellantis, formed from the merger of Fiat Chrysler Automobiles NV and PSA Group, is trying to protect production of its profitable Jeep and Ram brand vehicles from the global semiconductor shortage plaguing the auto industry.

The company already idled half of its 10 North American plants this month due to the shortage. It is also grappling with an uptick in coronavirus cases -- production at its Sterling Heights assembly plant, which makes the newer, pricier version of the Ram 1500 pickup, has been hampered in part by Covid-related absences, Bloomberg reported last week.

Michigan has become the worst virus hotspot in the U.S. as more contagious variants spread, while vaccine hesitancy and pandemic fatigue have undermined efforts to contain the virus.

Stellantis plans to begin offering vaccines to employees and their families at local union halls from this Friday.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.