GM extending temporary shutdowns at three factories due to global chip shortage

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General Motors shutters factories due to ship shortage

General Motors is extending the temporary shutdowns of three car and crossover SUV factories it maintains in North America. The manufacturer also stated it would idle a sedan plant it maintains in South America this spring. The firm is taking action to preserve its dwindling automotive semiconductor supplies for its most in-demand offerings.

GM previously revealed it would briefly close its U.S., Canada, and Mexico facilities through mid-March because of the global chip shortage.

Stellantis and Nio also recently provided updates on how the worldwide crisis is impacting their respective operations.

GM Extending Temporary Plant Closures

GM announced its Fairfax, Kansas, and Ingersoll, Canada factories will remain shuttered through mid-April, and its San Luis Potosi, Mexico plant will stay offline until the end of the month.

The corporation tasked its U.S. complex with manufacturing Chevrolet Malibu midsized cars and Cadillac XT4 SUVs. Its Canadian assembly center produced Chevrolet Equinox crossover vehicles. And its Latin American site assembled Equinoxes as well as GMC Terrain and Chevrolet Trax compact SUVs.

In addition, the automaker revealed it ill shutter its Gravataí, Brazil Chevrolet Onyx plant in April and May.

GM is idling those factories to ensure it has enough semiconductors to keep its most popular automobiles in production. The firm indicated certain unnamed full-sized trucks and SUVs are its manufacturing priorities. It also noted that it has yet to reduce output at any of its truck plants since the chip shortage began.

Nevertheless, the global component scarcity is having a significant impact on the Detroit-based corporation’s bottom line. The carmaker indicated the crisis would chop $1.5 billion to $2 billion off its 2021 annual earnings. AutoForecast Solutions anticipates the part shortfall will prevent GM from manufacturing over 216,000 units this year.

Stellantis and Nio Affected By Chip Shortage

Dutch automotive conglomerate Stellantis and Chinese electric vehicle startup Nio recently discussed how the global chip shortage is affecting their operations.

Stellantis CFO Richard Palmer declared the crisis’s financial impact on the corporation this year is a “big unknown.” CEO Carlos Tavares said the firm is striving to secure components to support its manufacturing efforts. However, he also expressed doubt about the automotive electronic part scarcity being resolved by mid-2021.

Last month, the carmaker temporarily suspended work at four of its European factories due to supply insufficiencies. It paused production at its Canadian Chrysler and Dodge minivan plant for three weeks in February for the same reason.

Nio revealed the global chip crunch and a battery shortfall caused it to reduce its output from 10,000 to 7,500 units in the second quarter. The company had increased its vehicle assemblies by 33.33 percent in February due to an uptick in demand. It expects to ramp up its manufacturing work in July and hopes to make 150,000 units throughout this year.

AlixPartners, a consulting firm, forecasts the worldwide semiconductor shortage would cost the automotive industry $60.6 billion in 2021. However, the group made its projections before GM, Stellantis, and Nio made their most recent production cutback announcements. As the crisis is apparently worsening, its impact on the vehicle sector might be greater than expected.

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