GM to Drastically Cut Vehicle Production in North America Due to Chip Shortage

GM to Drastically Cut Vehicle Production in North America Due to Chip Shortage

Trucks roll off the assembly line at GM’s Chevrolet Silverado and GMC Sierra pickup truck plant July 25, 2018 in Fort Wayne, Indiana.

John Grace | Reuters

DETROIT – General Motors is once again cutting production at its North American factories due to semiconductor chip shortages, signaling that the global parts problem remains a serious problem for the auto industry.

The automaker said Thursday it was adding or increasing downtime at eight factories in the United States, Canada and Mexico. Most of the new coupes last for two weeks, while production of its full-size Silverado 1500 and Sierra 1500 pickups in Indiana and Mexico is expected to resume after a week of shutdown starting September 19.

Other vehicles affected by the new production cuts range from mid-size Chevrolet and GMC pickups and vans in Missouri to the Chevrolet Trailblazer in Mexico and crossover production in North America.

“While the situation remains complex and very fluid, we remain confident in our team’s ability to find creative solutions to minimize the impact on our most demanded and limited capacity vehicles,” the company said in a statement Thursday. . can go.”

Chip shortages quickly turned into what many executives thought was a short-term problem in the first half of the year, which some say will last until 2022.

GM said last month that it plans to cut production by around 100,000 vehicles in North America in the second half of the year from the first six months. business does not release production data, but it sold about 1.3 million vehicles in North America during the first half of the year.

Automakers, including GM, have declined to release new forecasts on how they expect the parts issue to affect earnings due to the volatility of the situation. They previously estimated losses in the billions due to the problem, most of which were offset by record vehicle prices due to the auto shortage.

Semiconductor chip shortages are expected to cost the global auto industry $ 110 billion in revenue in 2021, according to a May forecast from consulting firm AlixPartners.

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