Fiat Chrysler Automobiles N.V. (FCAU - Free Report) recently announced that its subsidiaries FCA Italy and Maserati will temporarily suspend production across majority of its European manufacturing plants. The updated production plan will lead to the shutdown of the company’s facilities in Italy, Serbia and Poland until Mar 27, 2020.
In Italy, the shutdown will impact units in Melfi, G. Vico (Pomigliano), Cassino, Mirafiori Carrozzerie, Grugliasco, and Modena, while in Serbia and Poland, facilities in Kragujevac and Tychy will be affected, respectively.
Fiat plans to change the manufacturing processes and cut production levels in the plants to support the nation-wide campaign addressing the COVID-19 crisis. To limit contact among workers, the company will increase space between employees at their workstations. All areas of the plants, including rest areas and bathrooms, will receive intensive sanitisation. Other measures to contain the spread of the virus include enabling some employees to work from home and controlling numbers at company cafeterias.
The move is in sync with the Italy government’s decision to impose sweeping restrictions on travel and public gatherings across the country, as it tries to contain the outbreak of the virus. Italy has reported the largest coronavirus outbreak outside China, with more than 2,000 dead and more than 27,000 COVID-19 infections.
Fiat currently carries a Zacks Rank #3 (Hold). After the announcement, shares of the company depreciated 21.64% during pre-market trading to $7.86. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The rapidly-spreading coronavirus pandemic has become a concern for other global auto biggies as well, including Groupe PSA, Ford (F - Free Report) , General Motors (GM - Free Report) , Honda Motor (HMC - Free Report) , Nissan and Renault. Several automakers have closed their factories and suspended production. Apart from Fiat, Westport has temporarily halted production in its Brescia, Italy to curb the spread of coronavirus. The pandemic has not only dented consumer sentiment and thwarted vehicle demand but also distorted supply-chain balance globally.
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