GM extending plant shutdowns at three vegetation as a consequence of chip scarcity

General Motors employees work on the assembly line at the Fairfax Assembly & Stamping Plant in Kansas City, Kansas on Friday, April 26, 2019. The Fairfax facility produces the Cadillac XT4 and the Chevrolet Malibu.

Jim Barcus for GM

General Motors is extending the temporary shutdown at three assembly plants through mid-March due to a global shortage of semiconductor chips.

The affected plants are in Kansas; Ontario, Canada; and San Luis Potosí, Mexico. They produce the Chevrolet Malibu sedan and Buick Encore, Cadillac XT4, GMC Terrain and Chevy Equinox and Trax crossovers.

The shutdowns, which were originally supposed to last this week, will be re-evaluated in mid-March. They’re supposed to make sure the company has enough semiconductor chips to produce its more profitable pickups and SUVs.

“Semiconductor supply remains a problem facing the entire industry,” GM said in a statement. “GM plans to use every available semiconductor to build and ship our most popular and sought-after products, including full-size trucks, SUVs and Corvettes for our customers.”

GM’s shipments to Malibu and crossovers are higher than the industry’s usual “healthy” rating, meaning the automaker can afford to cut production at its plants, according to Cox Automotive.

Semiconductors are extremely important components of new vehicles in areas that range from infotainment systems to more traditional parts like power steering. They are also used in consumer electronics.

Automakers and suppliers warned of a semiconductor shortage late last year after vehicle demand rose faster than expected following a two-month shutdown of production facilities last spring due to the coronavirus pandemic.

Ford Motor was forced to cut production of its highly profitable F-150 pickups this week due to the shortage of chips. The company said it was unable to prioritize production of the pickups because they use unique chips compared to other models.

Ford said last week the shortage could cut its profits by $ 1 billion to $ 2.5 billion this year.

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