Fiat and Maserati (both part of the same company) had to halt production due to a supplier not delivering plastic components that go into the cars. This poses serious problems for Fiat because that means production is at a standstill. In one of our meetings in Detroit I recall an employee saying if production stops in one place it stops everywhere, it also means that the suppliers could be losing up to $1,000 a minute, which if you translate to an actual car manufacture can be far greater since it will ultimately be the finished product.
The supplier claims that Fiat is making a fuss about this because they tried to buy the suppliers company earlier this year and Fiat’s European market had a loss of $908 million last year. This further goes to show that just like with the Tohoku earthquake companies need to diversify their holdings and not just rely on one supplier for certain items, otherwise Fiat could end up like Lexus and other car companies where supply is limited.
This is also especially big for Fiat in the U.S. because within the last few years the Fiat 500 has been making headway in the U.S. market. A production halt like this one could yield bad results for Fiat numbers in the U.S.