General Motors is now the newest member of a rather unpleasant club – automaker’s hurt by a shortage of semiconductors, the company planning to cut production at four plants, three in North America, next week.
The auto company will shut down plants in Fairfax, Kansas; Ingersoll, Ontario; and San Luis Potosi, Mexico starting Feb. 8, while it’s Bupyeong 2 plant in South Korea will run at half speed during that time, the company said in a statement.
Several other automakers, including Big Three rivals Ford and Stellantis, have already shut down production due to the problem – an issue that will result in more than 670,000 lost units in the first quarter, reports IHS Markit, with about a third of that in China. The data group expects that North American producers will lose a little more than 100,000 units.
GM could lose as many as 10,000 vehicles
GM isn’t saying how many vehicles it will lose due to the stoppages, but AutoForecast Solutions predicted the company would take a hit of nearly 10,000 vehicles. The plants build the Chevrolet Malibu, Cadillac XT4, Chevy Equinox and Trax, and GMC Terrain SUVs and the Buick Encore.
“Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021,” the company said in a statement. “We are 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 further noted it will not impact the progress or production of its electric vehicle expected later this year, adding it would provide further insights during its earnings call Feb. 10.
Mazda Motor Corp. is considering cutting its global output by a total of 34,000 vehicles in February and March due to the shortage, sources told Reuters on Wednesday. Nissan said on Tuesday it cut three days of production on the truck line at its Canton, Mississippi, plant.
Automaker hopes to make up for lost production
On Tuesday, 15 U.S. senators, including some from key automotive states like Michigan, Ohio, Tennessee, Illinois, Indiana and South Carolina, urged the White House to work with Congress to address the chip shortage, Reuters reported.
Officials from the new Biden administration have scheduled a meeting for Thursday with their counterparts in Taiwan, according to the White House, and are expected to ask for help pressuring the world’s largest automotive chip supplier, Taiwan Semiconductor Manufacturing Co., to ramp up operations.
The dearth of semiconductors is just one more example of how the COVID-19 pandemic has hampered the industry. Today’s automobiles are essentially computers on wheels, using scores, even hundreds, of microprocessors and other chips to regulate their powertrains, control infotainment systems and operate the latest digital safety systems.
But the demand for microchips has overwhelmed the supply in recent months. Experts point to a variety of factors, but one key reason was the unexpectedly quick rebound of automotive manufacturing after pandemic-related shutdowns last spring.
Biden administration prodding semiconductor producer
Complicating matters, many suppliers have redirected chips for use by personal electronics manufacturers who have seen a surge in demand as millions of Americans – and others abroad – have struggled to cope with COVID lockdowns by working and shopping at home.