Chip crisis hits Stellantis' Italy output more than COVID did, union says

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FILE PHOTO: A Stellantis sign is seen outside company headquarters in Auburn Hills,

MILAN (Reuters) - The impact from a global semiconductor shortage on Stellantis' Italian car production this year will be worse and longer-lasting than the damage to output caused by the COVID-19 pandemic in 2020, Italy's FIM-CISL union said on Friday.

A global microchip shortage is pushing automakers to slow down production, with Stellantis halting operations at several facilities across Europe and the United States. The carmaker forecast it would make 1.4 million fewer vehicles this year.

"The semiconductor hurricane is causing production stoppages that are weighing more than the lockdown in 2020," FIM-CISL head Ferdinando Uliano said. "The forecasts are that such situation will carry on for the whole first half of 2022".

FIM-CISL said Stellantis had produced 319,000 cars in Italy in the first nine month of this year, 11% more than in the same period of 2020, when operations where frozen for several weeks following the COVID-19 outbreak.

But Uliano said 2021 full year production would hardly match the 461,000 units produced last year.

"It's practically impossible, the chip situation is getting more serious and we'll have further heavy closures," he said, adding a similar situation was expected with van production at the Sevel plant in central Italy.

Stellantis, formed earlier this year through the merger of Fiat Chrysler and France's PSA, will operate the Melfi plant, its largest Italian facility, for an equivalent of only six days in October.

On the other hand, Turin's Mirafiori, where the electric 500 small car is produced, is among the few plants which have not suffered major stoppages.

"Production of the BEV 500 must go on to meet targets on carbon emission reduction," Uliano said.

The world's fourth largest carmaker has also decided to close one German plant until the end of the year.

"The main risk is that Stellantis decides to delay planned investments and new model launches, as the chip crisis pushes sales down," Uliano said.

The carmaker will present Maserati's Grecale SUV next month, followed by Alfa Romeo Tonale SUV, with sale due from June 2022.

Italian unions will meet Stellantis on Monday at Italy's Industry Ministry to discuss production and jobs in the country.

(Reporting by Giulio Piovaccari; Editing by Alexander Smith)

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