GM extends production cuts amid semiconductor chip crisis

DETROIT/LONDON (Reuters) — The global semiconductor chip shortage led General Motors on Wednesday to extend production cuts at three North American plants and add a fourth to the list of factories hit, and Stellantis to warn the pain could linger far into the year.

The extended cuts do not change GM’s forecast last month that the shortage could shave up to $2 billion from this year’s earnings. GM Chief Financial Officer Paul Jacobson subsequently said chip supplies should return to normal rates by the second half of the year and he was confident the profit hit would not worsen.

However, Stellantis on Wednesday did not give an estimate for the financial hit it expects this year from the shortage and said the issue could last into the second half of 2021.

The chip shortage, which has hit automakers globally, stems from a confluence of factors as carmakers, which shut plants for two months during 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 during the pandemic, leading to tight chip supplies. They also bought more cars than industry officials expected last spring, further straining supplies.

GM did not disclose the impact on volumes or say which supplier or parts were affected by the chip shortage, but the U.S. automaker said it intends to recover as much of the lost output as possible.

“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs,” GM spokesman David Barnas said.