Chip shortage forces more production cuts by General Motors

by Jeremy

DETROIT — The global shortage of semiconductors has forced General Motors to cut production at six North American factories further as chip supplies seem to be growing tighter. The shutdowns likely will crimp dealer inventory of vehicles made at the plants. Still, GM says it has managed to keep factories humming that make hot-selling and very profitable full-size pickup trucks and SUVs.“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products,” the company said Thursday in a statement. The chip shortage has already been rippling through various markets since last summer. It has made it difficult for schools to buy enough laptops for students forced to learn from home, delayed the release of popular products such as the iPhone 12, and created mad scrambles to find the latest video game consoles such as the PlayStation 5.

Chip shortage forces more production cuts by General Motors

But things have been getting even worse in recent weeks, particularly in the auto industry, where factories are shutting down because there aren’t enough chips to finish building vehicles that are starting to look like computers on wheels. The problem was recently compounded by a grounded container ship blocking the Suez Canal for nearly a week, choking off chips from Asia to Europe.

These snags will likely frustrate consumers who can’t find the vehicle they want and sometimes settle for a lower-end model without as many fancy electronic features. And it threatens to leave a big dent in the auto industry, which by some estimates, will lose $60 billion in sales during the first half of the year.

Spring Hill, which makes the Cadillac XT5, XT6, and GMC Acadia SUVs, will shut down the weeks of April 12 and 19. Production of the Chevrolet Blazer at Ramos Arizpe will stop for a week on April 19, while the Lansing Grand River plant makes the Chevrolet Camaro and Cadillac CT4 and CT5 sedans, will stay shut down through the week of April 26.

The Lansing Delta Township plant will be down for a week starting April 19, cutting production of the Chevy Traverse and Buick Enclave SUVs, while the Ontario and Kansas plants will be shut down through the week of May 10. Both have been idle since February 8. The Ontario plant makes the Chevrolet Equinox SUV, while the Kansas plant manufactures the Chevy Malibu sedan and Cadillac XT4 SUV.

IHS Markit estimates that the chip shortage reduced North American auto production by about 100,000 vehicles from January through March. In January of last year, before the pandemic, the U.S. auto industry had enough cars to supply 77 days of demand. By February 2021, it was down almost 30% to 55 days. says discounts are down, and prices for new and used vehicles are up.

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