GM Extends Plant Closures of Three Plants Due to Chip Shortage

General Motors is extending the temporary shutdowns of three assembly plants until mid-March due to a global shortage of semiconductor chips.

The affected factories are in Kansas; Ontario, Canada; and San Luis Potosí, Mexico. They produce the Chevrolet Malibu sedan and the Buick Encore, Cadillac XT4, GMC Terrain and Chevy Equinox and Trax crossovers.

The closures, which were originally scheduled to last this week, will be reassessed in mid-March. They aim to ensure that the company has enough semiconductor chips to produce its most profitable pickup trucks and SUVs.

“Semiconductor sourcing remains a problem facing the entire industry,” GM said in a statement. “GM’s plan is to take advantage of all available semiconductors to build and ship our most popular and demanded products, including trucks, SUVs and full-size Corvettes for our customers.

Cox Automotive says GM’s supplies of the Malibu and crossovers are higher than what the industry generally considers “healthy,” meaning the automaker can afford to cut production at factories.

Semiconductors are extremely important components of new vehicles in areas ranging from infotainment systems to more traditional parts such as power steering. They are also used in consumer electronics.

Automakers and parts suppliers began warning of a semiconductor shortage late last year, after demand for vehicles rebounded stronger than expected following a two-hour shutdown. months of production plants last spring due to the coronavirus pandemic.

Ford Motor this week was forced to cut production of its highly profitable F-150 pickup trucks due to the chip shortage. The company said it was unable to prioritize production of the pickups because they use unique chips over other models.

Ford said last week that the shortage could cut profits from $ 1 billion to $ 2.5 billion this year.