The furlough of local Stellantis workers who build 9-speed transmissions has been extended another two weeks due to a growing global shortage of microchips.
Matt Jarvis, president of United Auto Workers Local 685, which represents the plants in Kokomo and Tipton, said in a video that although the downtime has been extended for most workers, one shift has been brought back at the Tipton Transmission Plant to build some 9-speeds.
One shift also has been brought back at the Kokomo Transmission Plant and Indiana Transmission Plant 1 to support the limited production of the transmission in Tipton. Jarvis said the units are being made for diesel vehicles in the Latin American market.
Around 1,800 workers were initially furloughed for the first two weeks of February. Jarvis said Tuesday he had not yet received new numbers on how many workers would continue to be temporarily laid off through the end of the month.
The local furloughs started after then Fiat Chrysler Automobiles paused production of the Jeep Compass in January. The vehicle is assembled in Toluca, Mexico, and uses the 9-speed transmission.
That led Stellantis, the company resulting from the Peugeot-FCA merger last month, to halt production of the 9-speed in Kokomo and Tipton for the first two weeks of February to avoid an overbuild of the transmissions.
“Hopefully this will stabilize,” Jarvis said. “... We’ve had discussions with the company and they’re trying to get this resolved.”
The furloughs were brought on by the pandemic-fueled chip shortage, which started when consumer demand soared for more vehicles as people looked to avoid using public transportation. Demand also spiked for devices like smartphones and gaming consoles that people use for entertainment while stuck at home.
The chips, also called semiconductors, have become part of the backbone of the auto industry, controlling nearly all electronic features inside a vehicle.
The shortage is now having a major ripple effect through the automotive industry, with companies like Ford, Subaru and Honda pausing production at some plants due to a lack of chips.
Stellantis last week idled its plant in Windsor, Ontario, which builds the Chrysler Pacifica, Voyager and Grand Caravan minivans. The shutdown started on Feb. 8, with production scheduled to start back up on March 1, according to Unifor, the Canadian union representing the plant.
Stellantis North America announced last week that production of the midsized Jeep Cherokee at the company’s Belvidere Assembly Plant in Illinois would be idled. United Auto Workers Local 1268, which represents the hourly workforce at the plant, said the shutdown would last a week.
Although the production of 9-speed transmissions has mostly halted at the Kokomo and Tipton plants, production of the 8-speed is booming, Jarvis said.
He said the company is directing what product it does have to vehicles that are selling well, such its trucks and Jeep products, which means higher demand for the 8-speed.
Workers on that line are working Saturdays, and can also volunteer to work Sunday shifts. Jarvis urged those who could work Sundays to do so.
“If we can’t make that product, they’ll end up buying it, and once they open that door to buy it, it’s hard to get that door closed,” he said. “So if you can work Sundays on the 8-speed, please try to protect our product and get it out so we can keep the plants running.”