Line workers work on the General Motors full-size truck chassis at the Flint Assembly plant on June 12, 2019 in Flint, Michigan.
JEFF KOWALSKY / AFP / Getty Images
General Motors cuts overtime production this weekend to two U.S. assembly plants that make their full-size pickups highly profitable due to the shortage of semiconductor chips affecting the global power industry. car.
The plants in Flint, Michigan and Fort Wayne, Indiana, produce a full-size tablet blend from the company, including the Chevrolet Silverado and GMC Sierra 1500 models, as well as its older siblings.
This is the first time the Detroit automaker has cut production shifts for its full-size pickups due to the shortage of chips for months. GM has significantly reduced production at its car and crossover plants in North America to prioritize chips for the company’s full-size pickups and SUVs.
In total, GM eliminates three extra shifts between the two plants on Saturday and Sunday.
“As we continue to manage the impact of semiconductors at our plants, we are balancing the availability of parts with our ability to operate efficiently throughout the week,” GM said in an emailed statement.
GM also produces the 1500 versions of the Silverado and Sierra tablet at a plant in Mexico.
In addition to shift shifts, GM said Friday it would cancel scheduled downtime in the weeks of June 28 and July 5 at all U.S. plants except a medium-sized truck plant in Missouri. GM hopes that production during these weeks, traditionally known as the summer break period, will help regain lost production from the first half of the year.
The changes come a day after GM and Ford Motor announced plans for a temporary slowdown or extended shutdowns at several North American plants.
GM CEO Mary Barra and Ford CEO Jim Farley are expected to attend a virtual CEO summit with the Biden administration on Monday to discuss global semiconductor shortages.
Semiconductors are key components in automobile manufacturing and are used in entertainment systems, power steering and brakes, among other things. As several plants closed last year due to Covid, suppliers shifted semiconductors to the auto industries, creating a shortage after consumer demand fell stronger than expected. Auto parts can contain various sizes and different types of chips.
For months, GM and Ford have prioritized the assembly of high-margin vehicles, such as full-size pickups, reducing the production of cars and crossovers. Even companies partially build vans to complete and ship later.
GM expects chip shortages to reduce its operating profit by $ 1.5 billion to $ 2 billion this year, while Ford said the situation could reduce its profits by $ 1 billion to $ 2.5 billion by 2021.
Consulting firm AlixPartners estimates that the shortage of chips will reduce global auto industry revenue by $ 60.6 billion.