The production cuts affect four factories.
The global semiconductor shortage continues to wreak havoc on the automotive industry as General Motors extends and expands its production shutdowns. The coronavirus pandemic has caused a surge in consumer electronics purchases, straining chip supplies and forcing automakers to make difficult choices as they struggle to build their cars. Computer chips have become integral to the automobile as automakers cram more technology inside of them.
Production shutdowns will continue at three North American GM plants while a fourth in South America will shutter next month, reports Reuters. GM’s Fairfax, Kansas, and Ingersoll, Ontario, Canada, plants will see their shutdowns extended through mid-April, factories where it builds the Chevy Malibu, Cadillac XT4, and Chevy Equinox. GM’s San Luis Potosí, Mexico, plant will continue its shutdown through the end of March, disrupting Equinox, Chevy Trax, and GMC Terrain production. In April, GM’s São Paulo, Brazil, factory will join the list of shuttered plants as it ends production through May.
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AutoForecast Solutions estimates that the shortage could cause the General to lose production of 216,000 units, according to the publication. The chip shortage and associated production shutdowns are reverberating through the industry, leaving few unaffected. Ford announced last month that it had to cut F-150 production due to the chip shortage. After a year of pandemic-related issues, the unforeseen disruption could see GM lose up to $2 billion in earnings, with Ford predicting up to $2.5 billion in losses.
However, not every automaker missed the signs of the coming shortage. Toyota and Hyundai both stockpiled chips in anticipation, though with the deficit expected to last through the middle of the year, they, too, could eventually face constraints. Chip supplies are not expected to return to normal levels until the second half of this year, making for a tenuous summer.
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The US government is attempting to alleviate the shortage by seeking $37 billion in funding for US chip manufacturing, but that will do little in the immediate future. Semiconductor factories are complex production facilities that require billions of dollars and years to build, according to The Washington Post.