GM extends plant shutdowns to three floors due to scarcity of shavings

General Motors extends temporary shutdowns to three assembly plants until mid-March due to global shortage of semiconductor chips.

The affected plants are found in Kansas; Ontario, Canada; and Potosí San Luis, Mexico. They produce the Chevrolet Malibu and Buick Encore sedan, Cadillac XT4, GMC Terrain and Chevy Equinox and Trax.

The shutdowns, which were originally scheduled to last this week, will be re-evaluated in mid-March. They are meant to ensure the company has enough semiconductor chips to produce its most profitable pickup trucks and SUVs.

“The supply of semiconductors remains a problem facing the entire industry,” GM said in a statement. “GM’s plan is to take advantage of all available semiconductors to build and ship our most popular and sought-after products, including full-size trucks, SUVs and Corvettes for our customers.”

Cox Automotive claims that GM’s supplies to Malibu and crossovers are higher than what the industry normally considers “healthy,” meaning the automaker can afford to reduce production at the plants.

Semiconductors are extremely important components of new vehicles for areas ranging from entertainment systems to more traditional parts such as power steering. They are also used in consumer electronics.

Automakers and parts suppliers began warning of a shortage of semiconductors late last year after demand for vehicles bounced back more strongly than expected after the two-month shutdown of the production plants last spring due to the coronavirus pandemic.

This week, Ford Motor was forced to cut production on its highly profitable F-150 trucks due to a shortage of chips. The company said it was not able to prioritize the production of the tablets because they use unique chips compared to other models.

Ford last week said the shortage could cut its profits by $ 1 billion to $ 2.5 billion this year.