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Business & Finance

GM further cuts production in North America due to global chip shortage

  • The action was factored into GM's prior forecast that it could shave up to $2 billion off this year's profit, spokesman David Barnas said.
  • Semiconductors are used extensively in cars, including to monitor engine performance, manage steering or automatic windows, and in sensors used in parking and entertainment systems.
Published March 24, 2021
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DETROIT: General Motors Co extended production cuts in North America on Wednesday due to a worldwide semiconductor chip shortage that has impacted the auto sector.

The US automaker said its Wentzville, Missouri, assembly plant would be idled during the weeks beginning March 29 and April 5. It will extend down time at its plant in Lansing, Michigan, which has been idled since March 15, by two weeks.

The action was factored into GM's prior forecast that it could shave up to $2 billion off this year's profit, spokesman David Barnas said. GM did not disclose how much volume would be lost by the move, but said it intended to make up as much lost production as possible later in the year.

The chip shortage came as North American auto plants were shut for two months during the COVID-19 pandemic last year and chip orders were canceled, and as demand surged from the consumer electronics industry as people worked from home and played video games. That's now left carmakers competing for chips.

Semiconductors are used extensively in cars, including to monitor engine performance, manage steering or automatic windows, and in sensors used in parking and entertainment systems.

Vehicles affected by the GM production cuts include the mid-sized pickup trucks, the Chevrolet Colorado and GMC Canyon in Missouri, and the Cadillac CT4 and CT5 and Chevy Camaro cars in Michigan.

Meanwhile, GM said its San Luis Potosi, Mexico, assembly plant, idled since Feb. 8, will resume production with two shifts beginning the week of April 5.

Last week, GM said it was building certain 2021 light-duty full-size pickups without a fuel management module, hurting their fuel economy performance by one mile per gallon.

Exacerbating the shortage is a recent fire at a Renesas Electronics chip plant in Japan. Barnas said GM was assessing the impact of the fire.

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