General Motors employees work on the assembly line at the Fairfax stamping and assembly plant in Kansas City, Kansas.
Jim Barcus for General Motors
DETROIT – General Motors is extending temporary shutdowns at three of its North American factories due to a global semiconductor chip shortage, which is expected to cause billions of dollars to lose profits for automakers in 2021.
The move to extend the shutdowns of car and crossover factories in Kansas, Mexico and Ontario, Canada, aims to prioritize chips for the production of GM’s full-size pickup trucks and SUVs, the company said. Wednesday. GM also said its Gravatai plant in Brazil will take downtime in April and May.
GM had previously said North American factories would be closed at least until mid-March. The San Luis Potosi The plant in Mexico is now expected to be shut down until the end of March, while plants in the United States and Canada will be closed until at least mid-April.
The announcement comes a week after GM CFO Paul Jacobson said the chip shortage was improving, but the company still expected the delays to cut its free cash flow by 1.5 billion dollars and 2.5 billion dollars in 2021.
“GM continues to use all available semiconductors to build and ship our most popular and demanded products, including trucks and full-size SUVs for our customers,” the company said in a statement. “GM has not taken downtime or reduced shifts at any of its truck plants due to the shortage.”
Automakers and parts suppliers began warning of the shortage late last year, after demand for vehicles rebounded more strongly than expected after automakers were forced to shut down production at the end of last year. last spring to help contain the coronavirus pandemic.
Consulting firm AlixPartners estimates that the chip shortage will reduce the global auto industry’s $ 60.6 billion revenue this year. This estimate includes the entire supply chain – from auto dealers and manufacturers to large suppliers and their smaller counterparts.
Solid-state chips are extremely important components in new vehicles for areas like infotainment systems and more basic parts like power steering and brakes.
Depending on the vehicle and its options, experts say a vehicle could have hundreds of semiconductors. More expensive vehicles with advanced infotainment and security systems have many more chips and different chip types than a base model.