GM Joins Nissan & Ford In Suspending Production Due To Semi Shortage

GM Joins Nissan & Ford In Suspending Production Due To Semi Shortage

General Motors has announced it is the latest victim of the global semiconductor shortage in the auto industry. 

Mid-day on Wednesday the U.S. automaker announced that the shortage would “impact production in 2021”, according to StreetInsider. The company said in a statement that “semiconductor supply for the global auto industry remains very fluid”.

It continued: “Our supply chain organization is working closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM. Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021.”

The automaker said it is “currently assessing the overall impact, but our focus is to keep producing our most in-demand products – including full-size trucks and SUVs and Corvettes – for our customers.”

The company said the following GM assembly plants will take downtime on all shifts the week of Monday, Feb. 8:

  • Fairfax (Kansas)
  • CAMI (Ingersoll, Ontario)
  • San Luis Potosi (Mexico)

“In addition, we will take downtime at our Bupyeong 2 assembly plant in Korea and operate at half capacity beginning the week of Feb. 8.” the company announced. “Due to the fluidity around the availability of parts, our current plan is to update the plants each week. Our intent is to make up as much production lost at these plants as possible. Importantly, this issue will not impact our commitment to an all-electric future. We will provide further details on this matter when we report our 2020 earnings on Feb. 10.”

Nissan also announced Wednesday that it had fallen victim to the shortage. As a result, Nissan said it would suspend some truck production at its Mississippi plant due to the shortage of chips. Nissan is struggling to make “short term production adjustments”, according to Yahoo Finance, at its plants in North America.

The stoppage is starting with three non-production days at the Canton, Mississippi plant. Further delays could continue if the semi shortage continues to negatively affect business. 

We also noted just hours ago that Ford had also announced it was making more production cuts and temporary layoffs at its Chicago Assembly Plant. The most recent round of layoffs is also being attributed to the supply chain disruptions in semiconductors, according to The Pantagraph

The affected plants, which will be subject to layoffs or shift reductions, are:

  • Dearborn Assembly Plant, which makes the F-150 pickup.

  • Kansas City Assembly Plant, which makes the F-150

  • Louisville Assembly Plant, which makes the Ford Escape and Lincoln Corsair

  • Chicago Assembly Plant, which makes the Explorer, Police Interceptor and Lincoln Aviator

“At the Chicago Assembly Plant, two shifts will be laid off next week,” the report says. 

A letter written by UAW Local 551 Chairman Coby Millender that has been circulating in Chicago warns workers to be wise with their finances:

“The company has informed us that beginning next week, they want to have B and C crew laid off initially for one week with a strong potential for additional weeks. It’s totally based on how soon the supplier resolves this issue. I just wanted to make you aware 551, so that you can begin to plan accordingly. Be wise with your finances.”

Recall, we wrote just days ago how the industry was “panicked” about the semi shortage. Major players like VW, Toyota and GM are still suffering from a shortage of chips that are becoming more common in everyday vehicles, we noted. The drain on the supply chain has come from a corresponding rise in the sales of gaming consoles, TVs and computers – mostly as a result of the pandemic. The chips are now being used in everything from vehicle entertainment centers to anti-lock brakes. 

Simply put, as China rampantly stocked up on chips amid fears of the Huawei trade wars, global supply has been eviscerated.

Tyler Durden
Wed, 02/03/2021 – 12:15

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