GM To Temporarily Shut Down Most North American Truck Production Due To Chip Shortage

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GM To Temporarily Shut Down Most North American Truck Production Due To Chip Shortage

Due to the semiconductor chip scarcity afflicting automakers around the world, General Motors (GM) will once again halt certain vehicle manufacturing.

According to CNN, the carmaker will cease production of most of its full-size pickup trucks in North America for the next week, beginning Monday.

GM previously stated that plant closures due to the semiconductor shortage will save the company $1.5 to $2 billion in operating costs this year.

According to CNN, GM will shut down its assembly facility in Fort Wayne, Indiana, on July 26 for a week. The Chevy Silverado 1500 and GMC Sierra 1500 pickups are built at this site. It will also reduce production in Flint, Michigan, from three to one shift and stop production in Silao, Mexico, according to the news outlet.

The Flint plant produces the heavy-duty Silverado and Sierra pickup trucks, while the Silao plant produces the Sierra 1500 and the Silverado 1500 Cheyenne for the Mexican market.

According to CNBC, the factories are slated to resume full output the week of August 2.

“The global semiconductor shortage remains complex and very fluid,” GM said in an emailed statement. “GM’s global purchasing and supply chain, engineering, and manufacturing teams continue to find creative solutions and make strides working with the supply base to minimize the impact on our highest-demand and capacity-constrained vehicles, including full-size trucks and SUVs for our customers,” GM said.

The most profitable segment of GM’s car inventory is pickup trucks and SUVs.

Despite the chip supply problem, the business has sought to keep the best-selling vehicles in production by shifting parts away from less popular models, CNN reported. However, further global shutdown limits are on the way as a result of the COVID Delta variation, which is exacerbating the problem.

“These recent scheduling changes are being driven by temporary parts shortages caused by semiconductor supply limits from international markets facing COVID-19-related restrictions,” GM told CNN. “We believe it will be a short-term issue.”

GM isn’t the only company that has had to temporarily shut down factories due to chip supply chain concerns. According to Reuters, Toyota closed three operations in Thailand and one in Japan owing to supply chain problems caused by the COVID outbreak. According to local news sources, Honda also closed a factory in Japan.

Ford has reportedly stated that the chip shortfall will cost the company $2.5 billion in 2021.

As of 2:18 p.m. EDT, GM stock was trading at $55.96. Brief News from Washington Newsday.

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