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The auto industry continues to suffer from the effects of the worldwide shortage of silicon chips. General Motors will halt production of midsize pickups at a plant in Missouri until April 12 and will extend the closure of another plant in Michigan. In South Korea, the Hyundai Motor Group, which has not been affected so far, now says it expects to have production problems in April due to the shortage. And if that weren’t enough, a fire at a factory in Japan will further aggravate the problem.
The chip shortage started with the COVID-19 pandemic. While countries around the world entered into a blockade in 2020 to combat the spread of the virus, many automakers have seen their sales evaporate at the same time that public health measures have forced the closure of some factories. Consequently, some of these companies canceled pending orders for chips, which resulted in the swapping of foundries to fulfill other orders. But as demand for new vehicles began to rise, OEMs found that it would be some time before their chip suppliers could fulfill these new orders, since the chip factories lacked spare capacity.
In February, GM said it had to halt production at plants in Kansas, Canada, Mexico, Brazil and South Korea, as it prioritized more profitable product lines. Some of these plant closures will continue until April, the company now says. Now, it will also shut down a plant in Missouri that currently builds mid-size GMC Canyon and Chevrolet Colorado pickup trucks by April 12 at the earliest. And another GM plant in Michigan will be idle two weeks ahead of schedule in late May. And while keeping the production of full-size trucks stable, some of the pickups are leaving the production line without a chip that allows their 5.3 L V8 engines to deactivate certain cylinders for better fuel efficiency.
So far, Hyundai had managed to avoid interruptions in manufacturing, as it had not canceled any of its chip orders. But it also expects to encounter a shortage of silicon chips in April, as its stocks are low, and the company is adjusting its production to prioritize popular vehicles (which is bad news for the excellent Sonata sedan).
Other automakers have also prioritized their most popular (and most profitable) pickups and SUVs, but some are also in short supply. Last week, Ford revealed that it is building F-150 pickups and Edge SUVs with missing chips and will store them while waiting for new silicon to arrive, at which point it will complete the vehicles and ship them to dealerships. Ford is also reducing shifts at its plant in Louisville, Kentucky, and extending shutdown at its plant in Cologne, Germany.
Stellantis also revealed plans to build Ram 1500 Classic pickups in Michigan and Mexico without some electronic components. Like Ford, it will store these trucks and complete them as soon as it has sufficient parts inventory.
To further complicate matters, a Japanese semiconductor factory owned by automotive supplier Renesas was destroyed by fire last Friday. Two-thirds of the factory’s production went to the auto industry. This may well result in delays in Toyota’s production, which has so far managed to avoid interruptions.