Automobile

Stellantis puts supply strategies ‘into action’

“There’s a possibility that we need to look at how we manage the supply chains, that we have more visibility of what’s happening in the various tiers of the supply chain, so that our intelligence is more immediate, and we can move faster,” Stellantis CFO Richard Palmer said on an earnings call with analysts last week. “We have our supply chain and purchasing teams working on that, and they are already putting some of those things into action as we manage through the crisis.”

The chip shortage prompted extra downtime at several plants this week. Production of the Jeep Cherokee in Belvidere, Ill., will remain offline through the middle of May. Minivan production in Windsor, Ontario, will stay paused for at least one more week.

The automaker continues to adjust after losing about 190,000 units, or 11 percent of planned production, in the first three months of the year. Jeep Compass assembly resumed in Mexico last week, and Stellantis told some workers who were warned of a three-week layoff this month from the Jeep Grand Cherokee and Dodge Durango plant in Detroit that it would be only two weeks.

Some of Stellantis’ first-quarter financial results remain unknown, now that the automaker is following French rules that require full reports only every six months. The automaker increased revenue 14 percent to $44.5 billion on a pro forma basis, compared with the first quarter of 2020. North American revenue rose 9 percent to $19.1 billion.

Palmer said the company expects the chip issues to lessen in the second half of the year, but that the current quarter will probably be more challenging than the first.

Stellantis executives said looming introductions of the Jeep Grand Cherokee L, Wagoneer and Grand Wagoneer are all still on track for this summer, as is the launch of the redesigned Grand Cherokee in the third quarter. Wagoneer and Grand Wagoneer production is slated to begin in June, while the first three-row Grand Cherokees already have been built.

“Clearly this is a competitive game, and we are focused on executing to manage the impact better than our competition as much as is possible,” Palmer said. “We do have limited visibility on what the full year impact might be. What we do anticipate is the Q2 impact will be more significant than Q1.”

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