The global shortage of semiconductors is forcing General Motors and Ford to further cut production at North American factories as chip supplies seem to be climbing tighter
DETROIT — The global lack of semiconductors has compelled General Motors and Ford to additional cut production at their own North American factories as chip provides appear to be growing tighter.
The shutdowns likely will crimp dealer stock of vehicles made in the plants.
GM says it’s managed to keep humming factories which make hot-selling and very profitable full-size pickup trucks and SUVs.
“GM continues to leverage every available semiconductor to build and send our most popular and in-demand products,” the company said Thursday in a statement.
The chip deficit has already been rippling through various markets since last summer. It has made it difficult for schools to buy enough laptops for pupils forced to learn from home, delayed the release of popular items like the iPhone 12 and made mad scrambles to discover the most recent video game consoles, like the PlayStation 5.
But things have been getting even worse in recent weeks, especially in the auto business, 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 with a grounded container ship which blocked the Suez Canal for almost a week, choking chips off led from Asia to Europe.
These snags are very likely to frustrate consumers who can not find the car they want and sometimes find themselves settling for a couple of models without as many elaborate electronic capabilities. And it threatens to leave a major dent in the auto business, which by some estimates stands to lose $60 billion in earnings during the first half of his year.
Spring Hill, Making the Cadillac XT5, XT6 and GMC Acadia SUVs, will shut down the months of April 12 and 19. Production of this Chevrolet Blazer in Ramos Arizpe will cease for a week on April 19, although the Lansing Grand River plant, which 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 beginning April 19, cutting production of the Chevy Traverse and Buick Enclave SUVs, while the Ontario and also Kansas plants will be closed down during the week of May 10. Both have been unsatisfactory because the week of Feb. 8. The Ontario plant leaves the Chevrolet Equinox SUV, although the Kansas plant manufactures the Chevy Malibu sedan and Cadillac XT4 SUV.
Additionally Thursday,” Ford said it would shut down its Chicago, Flat Rock, Michigan, along with the Transit van facet of the Kansas City Assembly Plant in Claycomo, Missouri, during the week of April 12. However seven U.S. plants will operate through both conventional summer shutdown weeks in late June and early July. The Chicago plant makes the Ford Explorer and Lincoln Aviator SUVs, while Flat Rock makes the Mustang sports car.
GM expects the chip shortage to cost it up to $2 billion in pretax earnings this season from lost production and sales. Ford is bracing for a comparable blow.
IHS Markit quotes that from January through March, the processor shortage reduced North American auto production by about 100,000 vehicles. In January of this past year, before the outbreak, the U.S. auto industry had sufficient vehicles to provide 77 days of need. From February of 2021 it was down almost 30% to 55 days. Edmunds.com says discounts are down and prices for new and used vehicles are upward.