Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

GM extends vehicle production cuts due to global chip shortage

TechnologyFeb 09, 2021 03:40PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. The GM logo in Warren Michigan

By Ben Klayman

DETROIT (Reuters) - General Motors Co (NYSE:GM) said on Tuesday it was extending production cuts at three North American plants until at least mid-March due to the global semiconductor chip shortage, while vehicles at two other factories would only be partially built.

GM's U.S. rival Ford Motor (NYSE:F) Co also said Tuesday that it was in limited cases parking partly assembled vehicles due to the chip shortage.

GM, whose shares dipped 1.1% after the announcement, did not disclose the impact on volumes or say which supplier and vehicle parts were affected by the chip shortage.

But it said it would focus on keeping production running at plants building its highest-profit vehicles: full-size pickup trucks and SUVs. GM said it intended to make up as much lost production as possible once the shortage chip eased.

"Semiconductor supply remains an issue that is facing the entire industry," GM spokesman David Barnas said. "GM's plan is to leverage every available semiconductor to build and ship our most popular and in-demand products."

GM said it was extending downtime at its U.S. plant in Fairfax, Kansas; its Canadian factory in Ingersoll, Ontario; and its Mexican facility in San Luis Potosi until mid-March when it would reassess the situation, he said.

In addition, GM said it would build but leave incomplete for final assembly vehicles at Wentzville, Missouri, and its Mexican plant at Ramos Arizpe.

GM vehicles affected by the idled plants include the Chevrolet Malibu sedan, Cadillac XT4 SUV, Chevy Equinox, and GMC Terrain SUVs. Vehicles to be left incomplete for now included the Chevy Colorado, GMC Canyon pickups and Chevy Blazer SUV.

This week, GM had said it was idling the three factories where it has now extended downtime and said it would halve production at a plant in South Korea.

Ford's chief product platform officer, Hau Thai-Tang, at a conference on Tuesday raised the possibility that Ford might have to park vehicles that would need parts added later because of the chip shortage. Kelli Felker, a Ford spokeswoman, later said the company was doing that "in limited cases," but did not say what vehicles were affected.

The shortage stems from a confluence of factors as auto manufacturers, which shut plants for two months during the COVID-19 pandemic last year, compete against the sprawling consumer electronics industry for chip supplies.

Consumers have stocked up on laptops, gaming consoles and other electronic products during the pandemic, leading to tight chip supplies. They have also bought more cars than industry officials expected last spring, further straining supplies.

The chip shortage has affected many automakers, including Toyota, Volkswagen (DE:VOWG_p), Stellantis, Renault (PA:RENA), Subaru (OTC:FUJHY), Nissan (OTC:NSANY), Honda and Mazda.

VW said Tuesday it expects chip supply to remain tight in the first half of the year.

AutoForecast Solutions on Tuesday updated its estimate for lost production this year, saying the global industry could lose almost 1.3 million vehicles as a result of the shortage. GM could lose an estimated 111,450 vehicles, the forecasting firm said.

Honda and Nissan said on Tuesday they would sell 250,000 fewer cars in total this financial year due to the chip shortage.

Ford said last week the shortage was hitting production of its highly profitable F-150 pickup trucks, saying it could lose 10% to 20% of planned first-quarter vehicle production and earnings could fall by $1 billion to $2.5 billion.

Taiwan, home to the world's largest contract chip maker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), is at the center of efforts to resolve the shortage. U.S. officials discussed the issue with their Taiwanese counterparts last week.

Chinese officials said on Tuesday they had met with auto and chip companies, asking them to help ease the shortage. French state officials meet with auto and electronics industry leaders on Wednesday to discuss the issue.

The Mexican Automotive Industry Association (AMIA) said this week that chip shortages had hurt national auto production in January, and it would likely dampen output during the first half of 2021.

The Information Technology Industry Council, which represents technology and auto companies, wrote U.S. President Joe Biden on Tuesday urging action to address the shortage, including providing "substantial funding" to ensure there will be enough chips.

GM extends vehicle production cuts due to global chip shortage
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Vlad Lozovskiy
Vlad Lozovskiy Feb 09, 2021 10:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sold everything to Chinese?  Cheaper to make it there?  Now eat it!!!
Wayne Gillispie
Wayne Gillispie Feb 09, 2021 10:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Just like the mask shortage. 95% are made outside the USA. Unfortunately, taxpayers will have to bail out the greedy corporations once again.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email