General Motors employees work on the assembly line at the Fairfax Assembly & Stamping Plant in Kansas City, Kansas.
Jim Barcus of General Motors
DETROIT – General Motors is extending temporary shutdowns at three of its North American plants due to the global scarcity of semiconductor chips, which is expected to reduce billions of automakers’ earnings in 2021.
The decision to extend outages at auto and crossover factories in Kansas, Mexico and Ontario, Canada, is an effort to prioritize chips for the production of GM pickups and SUVs, the company said on Wednesday. GM also said that its Gravataí plant in Brazil will be shut down in April and May.
GM had previously said that factories in North America would be closed until at least mid-March. San Luis Potosi The plant in Mexico is now scheduled to stop by the end of March, while plants in the US and Canada will be closed at least until mid-April.
The announcement came a week after GM CFO Paul Jacobson said the chip shortage was improving, but the company still expected delays to reduce its free cash flow by $ 1.5 billion and $ 2 , 5 billion in 2021.
“GM continues to take advantage of all available semiconductors to build and ship our most popular and in-demand products, including large trucks and SUVs to our customers,” the company said in a statement. “GM has not stopped or reduced shifts at any of its truck plants due to shortages.”
Automakers and parts suppliers began to warn of shortages at the end of last year, after vehicle demand rebounded more strongly than expected, after automakers were forced to shut down production last spring to help contain the coronavirus pandemic.
Consulting firm AlixPartners estimates that the chip shortage will cut $ 60.6 billion in revenue from the global automotive industry this year. This estimate includes the entire supply chain – from resellers and automakers to large suppliers and their smaller counterparts.
Semiconductor chips are extremely important components of new vehicles for areas such as infotainment systems and more basic parts, such as power steering and brakes.
Depending on the vehicle and its options, experts say a vehicle can have hundreds of semiconductors. The most expensive vehicles with advanced security and infotainment systems have much more and different types of chips than a basic model.