General Motors will temporarily close eight of its 15 U.S. assembly plants for a week starting Monday due to the worsening global microchip shortage, according to ABC News.
Why it’s important: The coronavirus pandemic and other disasters have disrupted semiconductor supply chains, which are crucial for thousands of computer-controlled systems in new vehicles.
- The shortage has forced GM to reassign its chips to a small number of plants that produce the company’s most popular and profitable vehicles, such as its SUVs and vans, according to CNN.
The big picture: The shortage of chips has led to a drop in the inventory of new vehicles, which has led to higher prices that fuel inflation, according to Felix Salmon of Axios.
- Relief for automakers and other producers who require semiconductors seems to be on the horizon as chip producers increase production to meet demand.
In depth: It is possible that the shortage of chips from vehicle manufacturers will end up causing prices to rise