Fiat Chrysler Automobiles is idling two North American assembly plants, including its Brampton, Ont., plant, until the end of January due to the ongoing global microchip shortage.
"We are working closely with our global supply chain network to manage any manufacturing impact caused by the global microchip shortage. As a result, we have taken the decision to delay the restart of our Toluca, Mexico plant which builds the Jeep Compass and schedule down time at our Canadian plant in Brampton, Ont., which builds the Chrysler 300 and Dodge Charger and Challenger,” FCA Canada spokeswoman LouAnn Gosselin said in a statement to Automotive News Canada.
“This will minimize the impact of the current semiconductor shortage while ensuring we maintain production at our other North American plants."
The move suggests FCA will allocate its microchips to more crucial higher-margin vehicles, although Gosselin declined to comment on the strategy.
It wasn't immediately clear exactly when the plants would be idled. FCA is just the latest to idle some production due to the shortage.
Ford Motor Co. said it will idle its assembly plant in Louisville, Ky., next week because of the semiconductor shortage. Ford Canada said its production has not been affected.
The industry was already beginning to brace for impact as microchip prices rise and supplies of semiconductors dwindle.
Automakers in China were the first to feel the pinch partly because the world's biggest auto market is recovering so rapidly from the pandemic — chipmakers simply can't keep up with its rebound. But as North America and Europe bounce back, they have come under pressure.
As suppliers and automakers scramble to secure microchips to feed the growing vehicle output, automakers could be forced to prioritize production of certain vehicles or trim lines at the expense of others.
In a phone interview, Gosselin said the company wasn’t going to comment “beyond our statement.”
Elsewhere in Ontario, Toyota said its production of the RAV4 and Lexus RX 350 and the RX 450h is unaffected.
“This is a larger automotive industry supply chain issue that will reduce the availability of a component for the Toyota Tundra driveline electronics. While the parts shortage impacts many OEMs, the shortage for Toyota North America is limited to the Tundra at this time. We do not expect any impact to employment,” Toyota Canada spokesman Michael Bouliane said in a statement.
The Tundra is built in Indiana.
Automotive News staff contributed to this report.
