General Motors Co. is expanding plans to slow down some of its North American factories, compounding the effects of the global semiconductor shortage on the automaker’s production.
The company announced Thursday that it will increase scheduled downtime at seven factories in the United States, Canada and Mexico. The move builds on cuts that have plagued GM and the wider auto industry throughout the year as computer chip supply constraints continue to hold back auto production.
Some production lines at two of GM’s Michigan sites, tasked with work on models such as the Chevrolet Traverse, Buick Enclave and Cadillac Black Wing, will likely have downtime until September, the company said. . At three plants in Canada and Mexico, production shutdowns for the Chevrolet Blazer and Equinox SUVs have also been extended. And at a Kansas plant, the restart of production of Chevrolet Malibu, which has been declining since February, has been postponed until November.
Other global automakers face similar challenges. Ford Motor Co. also slowed production this month, with work slowing or stopping at factories in Missouri, Michigan and Kentucky. Toyota Motor Corp. announced in August that it planned to cut its September production by 40% due to the semiconductor shortage.
Automakers use computer chips in everything from advanced driver assistance functions to engine controls and passenger accessories. Global chip production has been behind schedule for months.
As the pandemic hit the global economy last year, automakers lowered their production assumptions and underestimated their semiconductor needs when placing orders with suppliers. More recently, a new wave of Covid-19 infections in Malaysia and other Southeast Asian countries playing a major role in chip production has delayed manufacturing in factories that were already struggling to operate at full speed.
IHS Markit on Thursday cut its global light-duty vehicle production forecast by more than 13 million for 2021 and 2022 on Thursday, extending through 2022, “analysts at the research firm wrote of chip production shortfalls.
The era of Covid-19 has not been all bad news for the industry. Faced with tight supply, car buyers have flocked to dealerships this year, wowed by low interest rates and supported by government stimulus measures. Prices have reached record levels.
Over the summer, however, downturns in production left some dealer lots struggling for inventory. That reduced vehicle sales, which fell 14% year-over-year in August, according to Wards Intelligence.
Further downtime through mid-October will also affect another GM plant in Michigan, where it produces Chevrolet Bolt electric cars, amid supply issues for the cars’ batteries. GM last month released an expanded recall for bolts built in the past five years, aimed at tackling the dangers of battery fires. GM said it and LG Chem Ltd., the maker of batteries for cars, were working on a manufacturing issue that can result in two rare faults in a single battery cell, increasing the risk of fire.
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