General Motors to Suspend Production at 8 Plants in North America Due to Ongoing Chip Shortages
【Summary】U.S. automaker General Motors announced it is suspending production at half its factories in North America. The work stoppages are expected to last one to two weeks and begin on Monday, Sept 6. Only a handful of GM's North American plants will remain in operation during the shutdowns, including the plants make GM’s most profitable full-size SUVs and pickups.
Automakers around the world have been dealing with ongoing semiconductor and chip shortages. The chips are a key component for vehicle production and without them important many vehicles cannot be fully assembled.
As a result of the chip shortages, U.S. automaker General Motors announced it is suspending production at 8 of its 15 factories in North America. The work stoppages are expected to last one to two weeks and begin on Monday, Sept 6.
Four U.S. assembly plants will be affected in Lansing Mich, Fort Wayne, Indiana, Wentzville, Spring Hill, Tenn and Wentzville, MO. The others include three factories in Mexico and one in Canada.
Automakers had hoped the industry would recover from the chip shortages by now, but rising delta variant covid cases have impacted manufacturing in Southeast Asia, where most of the chip suppliers have their factories. But the surge in covid cases has resulted in worsening shortages for automakers.
Only a handful of GM's North American plants will remain in operation during the shutdowns. The plants make GM's most profitable full-size SUVs and pickups, along with the Chevy Camaro and Corvette sports cars.
To keep profitable trucks and SUVs rolling off the assembly line, GM is prioritizing the chips for these vehicles over its other models.
The plants to remain operating include GM's assembly factory in Arlington, Texas, where it makes its highly profitable full-size SUVs, such as the Tahoe and Chevy Suburban. GM's Flint Assembly will also remain operational. GM assembles its heavy-duty pickups in Flint, including the GMC Sierra HD.
"These most recent scheduling adjustments are being driven by the continued parts shortages caused by semiconductor supply constraints from international markets experiencing Covid-19-related restrictions," GM said in a statement.
The chips badly needed by automakers are used for vehicle electronics and modules, which are used in abundance in many modern vehicles. However, the same chips that automakers are scrambling to acquire are also used in laptops and gaming consoles.
The pandemic of last year resulted in millions of people working remotely, so the demand for electronic devices such as laptops, phones and tablets skyrocketed.
At the same time automakers curbed production in 2020 due to the pandemic, which reduced supplier orders for semiconductors and chips. Now that demand has returned, chip makers have fallen behind since the start of the new year in meeting the higher than expected demand.
In January, contract manufacturer Taiwan Semiconductor Manufacturing Co Ltd (TSMC) said it will "prioritize production of auto chips" if it can to further increase capacity, Taiwan's Economics Ministry said.
TSMC is the world's largest contract manufacturer of chips. In addition to the auto industry, TSMC also makes chips for Apple Inc., including the Apple A12 Bionic 64-bit ARM-based system on a chip (SoC) for the iPhone and iPad.
The chips are also used in small electronics, such as laptops and tablet computers. As children stayed home from school demand for personal electronics grew for education, which further contributed to the shortage of chips.
GM's domestic rival Ford Motor Co is also dealing with the lack of chips, prompting the automaker to cut production. Ford said this week it will stop making pickups at its Kansas City Assembly Plant for the next two weeks. Ford is cutting one shift at two other truck plants in Dearborn, Michigan and Louisville, Kentucky.
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