The severe floods in Brazil have taken an unexpected toll on Argentina‘s auto industry in recent days. Fiat’s Córdoba plant has been forced to stop production of its most popular car, the Fiat Cronos, due to supply and safety issues related to weather damage.
Fiat Stop at Córdoba: floods in Brazil block production of Cronos
The fury of Brazilian waters has halted Fiat production in Córdoba. Apparently the heavy rainfall that has hit the South American country hard in recent days has caused a lot of damage to infrastructure and transportation systems. This is creating a chaotic situation that consequently brings heavy repercussions to Fiat’s production line.
Currently, this stoppage only affects the production department of Fiat Cronos, which is the assembly line for the Italian automaker’s most popular model. But unfortunately, it cannot be ruled out that other departments may be slowed down in the coming days if the situation worsens.
The causes are, of course, roads and bridges made impassable by flooding, landslides and mudslides that have completely compromised the safety of workers. This in turn causes water and gas supply problems for the normal and proper operation of the plant. A dramatic picture that has forced Fiat to stop engines in Córdoba.
Certainly the consequences can be highly negative. The loss of production will almost certainly result in a drop in economic results for the company, with the consequent risk of delays in deliveries. Nor can it be ruled out that there may be a possible impact on employment, between layoffs and layoffs.
Production stoppage in Córdoba is part of an already complicated context for Argentina’s automotive industry. Indeed, the South American country is grappling with declining production due to semiconductor shortages, rising raw material costs and weak domestic demand. In addition, exports are also declining due to strong competition from other emerging countries and the economic slowdown in Brazil, which until now has been the main destination market for Argentine cars.
The Brazil unknown: floods in Brazil could further exacerbate the difficulties of the Argentine auto sector, negatively impacting the country’s economy. Losses to the industry could amount to several tens of millions of dollars. The Argentine government has announced an aid plan for companies affected by the disaster, but it is unclear whether it will be enough to avert a new drop in production and exports.
Fate of the Fiat plant in Córdoba and the entire Argentine auto sector at the moment is completely tied to the evolution of the situation in Brazil. Also deciding its fate will be the government’s ability to implement concrete measures to support the economy. A somewhat uncertain future that is already weighing on the shoulders of thousands of workers and the future of a key industry for the Argentine economy. Only time will tell if Brazil’s troubled waters can calm down enough to allow Fiat and the Argentine auto industry to resume normal production activities.