General Motor GM 2.90%
S Co. plans to reduce production at several plants this month due to chip shortages that are affecting the global automotive market.
GM said on Wednesday that it is scheduling shutdowns at four automakers, including three in North America, while trying to mitigate the impact of the semiconductor shortages and keep factories that produce high-demand models such as large trucks and SUVs up and running.
The Detroit automaker had previously signaled that the chip shortage could impact its operations, telling suppliers late last year that they should stock up on semiconductors. But as of January, production was not affected.
GM now plans to close three plants in North America for a week, starting on Monday. They include its assembly plant in Kansas City, Kansas, which makes the Chevy Malibu sedan and the Cadillac XT4 crossover, as well as its factories in Mexico and Canada that build two compact SUVs. It also plans to operate its factory in Korea that produces the Chevy Trax and Buick Encore at half capacity, starting next week.
GM said it will provide weekly updates on its plans, as well as more details when reporting earnings on February 10.
The auto industry is now one of the world’s largest buyers of computer chips, and demand is only increasing as automakers load their latest models with large screens and more sophisticated technology.
GM’s latest move illustrates that the chip shortage that emerged at Chinese factories last year continues to halt manufacturers’ production at a time when many are still recovering from Covid-19 related plant shutdowns in 2020.
Volkswagen AG
, Ford Motor Co.
and other major automakers have also reduced factory shifts in recent weeks due to limited chip supply. Industry executives fear the problem will only get worse before it gets better.
This week, the chip shortage temporarily halted U.S. production at several Ford SUV plants. At its plant in Chicago, the automaker is operating only an eight-hour shift, instead of three shifts, which will reduce production of the Ford Explorer SUV, one of its best-selling models, and the Lincoln Aviator SUV.
Ford also closed a plant this week in Louisville, Ky., Where it makes the Escape and Lincoln Corsair SUVs. The scarcity of semiconductors also contributed to Ford’s decision this week to stop its plant in Oakville in Ontario, Canada, where it manufactures the Ford Edge and Lincoln Nautilus SUVs.
Nissan Motor Co.
He said he canceled two days of production last month at his factory in Canton, Mississippi, and will take another day of downtime in February due to limited chip supply. The Japanese automaker builds several models at the factory, including the Titan pickup and the Altima sedan.
—Mike Colias contributed to this article.
Write to Christina Rogers at [email protected]
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Published in the February 4, 2021 print edition as ‘Shortage Of Chips Is Driving Cuts at GM.’