Stellantis NV, the world’s fourth-largest carmaker, said Friday (14) that it will lay off more than 1,600 employees at its Illinois Jeep plant, and Japanese carmaker Mazda predicted that the chip crisis will affect the production of 100,000 vehicles this year.
Stellantis, a new company created by the merger of two major car manufacturers Fiat Chrysler (FCA) and Bausch & Lomb Citroen Group (PSA), said it will lay off 1,671 employees at the Jeep plant in Illinois by July 26 in an effort to “balance sales and production “.
Stellantis also said that the chip shortage caused a significant drop in production of the Jeep Cherokee sport-utility vehicle, in order to balance the company’s operations so layoffs to survive this difficult time.
Mazda, on the other hand, predicted that the chip shortage will lead to 100,000 vehicles worldwide production affected, but will use the existing chip inventory to reduce the impact from 100,000 vehicles to about 70,000 vehicles.
Stellantis last year Jeep vehicle sales fell 29 percent to 191,397 units, while deliveries fell 14 percent during the New Crown outbreak. AutoForecast Solutions, an automotive data research firm, said Stellantis’ Illinois plant was idle in February, April and May of this year.
Stellantis NV has been cutting production for some time, first cutting three shifts at the plant last February, affecting more than 1,300 employees, and then pushing for workforce streamlining measures again in February this year, laying off 150 employees.
However, Stellantis reached a four-year agreement with the United Auto Workers (UAW) last November, and will not only not close the plant during the contract period, but will also make investments.
During the new epidemic, global lifestyles have changed dramatically, with work-at-home and school situations becoming the new daily routine in the post-epidemic era, which has also stimulated a surge in sales of consumer electronics, making the chip shortage problem even more severe.
AlixPartners, a management consulting firm, said Friday that if the chip shortage problem is delayed, the global auto industry faces a loss of $110 billion this year, doubling the $61 billion estimated in April, and auto production will drop by 3.9 million units, more than the 2.2 million estimated in April.