SEMICONDUCTOR CHIP SHORTAGE FORCES MORE PRODUCTION CUTS BY GM AND FORD
The global shortage of semiconductors has forced General Motors and Ford to further cut production at their North American factories as chip supplies seem to be growing tighter.
The shutdowns likely will crimp dealer inventory of vehicles made at the plants.
GM says it has managed to keep humming factories 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.
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 that blocked the Suez
Canal for nearly a week, choking off chips headed from Asia to Europe.
These snags are likely to frustrate consumers who can’t find the vehicle they want and sometimes find themselves settling for a lower-end models without as many fancy electronic features. And it threatens to leave a big dent in the auto industry, which by some estimates stands to lose $60 billion in sales during the first half of his year.
GM said that the cuts will take place at its Spring Hill, Tenn.; Ramos Arizpe, Mexico; Ingersoll, Ontario; Fairfax, Kan.; Lansing,
Mich., Delta Township; and Lansing, Mich., Grand River factories.
Also Thursday, Ford said it would shut down its Chicago, Flat Rock, Mich., and the Transit van side of the Kansas City Assembly Plant in Claycomo, Mo., during the week of April 12.
GM expects the chip shortage to cost it up to $2 billion in pretax profits this year from lost production and sales. Ford is bracing for a similar blow. In addition to GM and Ford, Nissan, Stellantis, Volkswagen and Honda seem to have been hit the hardest.