The furloughs of around around 1,000 Stellantis workers who build 9-speed transmissions has been extended another two weeks, and union officials say the company may be considering furloughs on the 8-speed line as well due to a global microchip shortage.
Employees on the 9-speed lines started furloughs at the beginning of April due to the ripple affects of the semiconductor chip shortage. The company initially planned to bring back workers Monday.
Matt Jarvis, president of United Auto Workers Local 685, which represents the plants in Kokomo and Tipton, said now the temporary layoffs have been extended to May 17.
However, he said, the company is giving some essential workers a chance to return to work to ensure all the machinery and equipment is ready to start producing transmissions again once workers return.
Jarvis said the company is also in discussions about whether to furlough some workers who build 8-speed transmissions.
"There's a potential," he said. "It just depends on whether they can secure the supplies they need to keep the assembly plants running."
Jarvis said he hopes to know what the company decides sometime this week.
The prospect of temporary layoffs on the 8-speed line marks a sharp pivot from earlier this year when Stellantis was asking employees to work overtime to produce the transmissions. In February, employees on that line were working Saturdays, and could also volunteer to work Sunday shifts.
The two-week extension of the furloughs on the 9-speed line is the second time this year the company has prolonged temporary layoffs for local workers.
Around 1,800 workers were initially furloughed for the first two weeks of February, which were then extended by two weeks for most employees.
Jarvis said the prospect of furloughs is something workers will have to adapt to as the chip shortage drags on.
"It's something we're dealing with," he said. "I think this is going to be our new normal through the end of the year."
The furloughs have been 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 such as 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.
For months now, the shortage has forcefully disrupted the automotive industry, with most companies scrambling to realign their production as they wait for more chips to arrive. Dealerships are also working with reduced inventory as fewer vehicles are being produced.
In a statement, Stellantis said it is "working closely with our global supply chain network to manage the manufacturing impact caused by the global microchip shortage."
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