Stellantis to halt production again at Italian plant in May, union says

MILAN, April 29 (Reuters) - Automaker Stellantis will halt production at its Melfi plant in southern Italy from May 3 to May 10 because of low demand triggered by the COVID-19 crisis and semiconductor shortages, the UILM union said on Thursday.

Stellantis, the world’s fourth largest automaker, makes Jeep Renegade and Compass models and the Fiat 500X compact SUV in Melfi, one of the group’s largest assembly facilities in Italy.

UILM’s Marco Lomio said the main reason for the stoppage was the semiconductor shortages.

“That’s the most serious problem,” he said. “I cannot rule out we’ll have further shift stoppages in May, as this issue is getting bigger and bigger and harder and harder to manage.”

A spokesman for Stellantis said the stoppage was due to both the semiconductor issue and weak market demand, adding that Melfi’s more than 7,000 workers would be put on a furlough scheme for the period.

Production at the plant has been repeatedly disrupted this year.

Unions are concerned that Stellantis could permanently cut capacity in Melfi by closing one of its two lines, as the carmaker seeks to reduce production costs in Italy.

Reporting by Giulio Piovaccari; Editing by Edmund Blair