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Italy - Fiat SpA (FIATY, F.MI)

Said Monday it had suspended the production of new models at two plants in Europe because it hadn't received components from a key supplier, describing it as a "serious problem" that was "causing damage" to the Italian auto maker as well as a number of its other suppliers.

Its sister company, Fiat Industrial SpA (FNDSF, FI.MI), the truck and tractor maker, said it had halted production in Spain for the same reason.

Both Fiat and Fiat Industrial said they had to stop assembly lines for a lack of components from Selmat Group, which makes plastic parts for the interior of vehicles like air vents, door panels and dashboards.

"Other plants run the risk of suspending their activities in the coming days," read a statement issued by Fiat. "All of this is creating serious damage to the Fiat Group and other suppliers."

A Fiat spokesman declined to identify these other plants. He was unable to quantify the damage caused by the supply disruption. The problem began earlier this year when Fiat complained about delays in the delivery of the components, among other issues, the spokesman said. It worsened by the end of April when the components started to become scarce, he said.

But Selmat's chief executive, Enzo Maccherrone, denied Fiat's accusations.

"We haven't stopped [supplying]. We're still delivering," he said in an interview. "If they suspended it [production] it must be for other reasons."

Mr. Maccherrone said Selmat and Fiat were engaged in a dispute, but he declined to elaborate for legal reasons. Fiat declined to comment on Mr. Maccherrone's affirmations.

Based in Fiat's hometown of Turin, Italy, Selmat is a privately held company with about 1,000 employees and factories in Italy, Poland, Turkey and China. It has some EUR130 million in annual sales, with Fiat and Fiat Industrial as its biggest customers. In April, it acquired Top Plastics Italy, another supplier of plastic parts to Fiat.

Fiat said it had stopped production Friday and Monday at its plant in Serbia where it makes the new 500L family car for the U.S. and other markets.

It did the same at a plant in the town of Grugliasco near Turin where its luxury sports brand Maserati makes a new version of its Quattroporte sedan.

Fiat also said it had slowed down production at its plant in Poland because more than 1,500 units of its Lancia Ypsilon hatchback were missing parts from Selmat.

Meanwhile, Fiat Industrial said its Iveco truck brand had stopped production at a Madrid plant where it makes the Stralis and Trakker trucks--bringing to more than 10 the days during which it has had to halt operations since the problem began.

Production at Fiat and Fiat Industrial plants in Italy have nevertheless been intermittent because of the weak demand for cars and trucks in Europe, with their workers in Italy staying at home on reduced pay.

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