Fiat-Chrysler (FCA) has warned that one of its European plants is facing a halt to production due to a break in supply of a critical component sourced in China.
The warning came in remarks by CEO Michael Manley following FCA’s latest financial results announcement. It is an indication of the wide potential impact to international supply chains of manufacturing disruption in China caused by the outbreak of the coronavirus outbreak there.
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Many factories in the Wuhan and Hubei province have been on lockdown since the start of the Chinese new year holidays and have extended shutdowns into next week, at least.
Manley told the Financial Times there was one critical supplier of parts that was putting European production at risk, but also added that he was concerned about the possible impact of three other suppliers in China.
The emerging problems for FCA outside of China are likely to be mirrored by other vehicle manufacturers and reflect the both the long-run internationalisation of parts supply chains and the predominance of ‘just-in-time’ lean manufacturing processes that keep inventory low.
Korean manufacturers were the first to show up as impacted by China supply chain disruption reflecting shorter shipment distances, but the FCA news indicates that impacts across the world are now coming over the horizon on shipment transit schedules.
See also: Plant closures in China extended as coronavirus crisis worsens
