GM extends production cuts

Semiconductor chip shortage blamed

DETROIT • General Motors Co said on Tuesday it was extending production cuts at three North American plants until at least mid-March due to the global semiconductor chip shortage, while vehicles at two other factories would only be partially built.

GM, whose shares dipped 1.6 per cent after the announcement, did not disclose the impact volumes or say which supplier and vehicle parts were affected by the chip shortage.

But it said it would focus on keeping production running at plants building its highest-profit vehicles: fullsize pickup trucks and SUVs. GM said it intended to make up as much lost production as possible once the shortage chip eased.

“Semiconductor supply remains an issue that is facing the entire industry,” GM spokesman David Barnas said. “GM’s plan is to leverage every available semiconductor to build and ship our most popular and in-demand products.”

GM said it was extending downtime at its U.S. plant in Fairfax, Kansas; its Canadian factory in Ingersoll, Ont.; and its Mexican facility in San Luis Potosi until mid-March when it would reassess the situation, he said.

In addition, GM would build but leave incomplete for final assembly vehicles at Wentzville, Missouri, and its Mexican plant at Ramos Arizpe.

GM vehicles affected by the idled plants include the Chevrolet Malibu sedan, Cadillac XT4 SUV, Chevy Equinox, and GMC Terrain SUVs. Vehicles to be left incomplete for now included the Chevy Colorado, GMC Canyon pickups and Chevy Blazer SUV.

This week, GM had said it was idling the three factories where it has now extended downtime and said it would halve production at a plant in South Korea.

The shortage stems from a confluence of factors as auto manufacturers, which shut plants for two months in the COVID-19 pandemic last year, compete against the sprawling consumer electronics industry for chip supplies.

Consumers have stocked up on laptops, gaming consoles and other electronic products in the pandemic, leading to tight chip supplies. They have also bought more cars than industry officials expected last spring, further straining supplies.

The chip shortage has affected many automakers, including Toyota, Volkswagen, Stellantis, Ford Motor Co, Renault, Subaru, Nissan, Honda and Mazda.

AutoForecast Solutions on Tuesday updated its estimate for lost production this year, saying the global industry could lose almost 1.3 million vehicles.

GM could lose an estimated 111,450 vehicles, the forecasting firm said.