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GM is extending production cuts until April due to a shortage of semiconductor chips

General Motors will close its three assembly stations until at least mid-April, and the fourth will be idle due to a severe shortage of semiconductor chips used in various parts.

But the automaker is doing its best to protect the production of its full-size pickup trucks, which are its big profits.

Demand for semiconductor chips is growing in part due to the growing demand for coronavirus epidemics, notebook computers, and other personal electronics using chips. Cars also use them in various parts of infotainment systems. In fact, part of the machine can use 500 to 1,500 chips, depending on the complexity of the part, analysts say.

On February 8, GM stopped production for two shifts, initially until mid-March at the following plants.

Fairfax Collection և Stamping Plant in Kansas City, Kansas. It takes about 2,000 hours to build a Chevrolet Malibu sedan և Cadillac XT4 SUV; CAMI in Ingersoll, Ontario, Canada. About 1,500 workers arrive at the Chevrolet Equinox SUV. San Luis Potos,, Mexico. Builds Chevrolet Equinox և Trax և GMC Terrain SUVs.

On Wednesday, GM said production at Fairfax և CAMI would now be halted by mid-April. GM suspends time in San Luis Potosև until the end of March.

In addition, GM Gravatai plant in Brazil will close in April-May. The Gravatai plant in Rio Grande do Sul, Brazil, is building the Chevrolet Onix, South America’s best-selling car.

“GM continues to use all of our existing semiconductors, our most popular and in-demand products, including full trucks, SUVs to build and deliver to our customers,” said David Barnas, GM spokesman. “GM did not idle at any of its trucks, did not reduce shifts.”

Loss compensation

GM builds its heavy, full pickups at the Flint Assembly Plant, and its light, full pickups at the Fort Wayne assembly plant in Indiana. It builds its medium-sized pickup trucks at the Missouri Vancouver Congregation and its large SUVs at the Arlington Congregation in Texas.

Last month, GM was forced to shut down Wentzville, Arlington and Fort Wayne as strong winter storms swept through the country, disrupting production, including demanding that GM shut down the line at Flint earlier in the week. due to weather disruptions in some parts.

Barnas noted that the GM supply chain team is working closely with its suppliers to find solutions to semiconductor requirements to mitigate the impact on GM vehicle production.

“Our goal is to produce as many losses as possible in these plants,” Barnas said. “We were thinking about this downtime when we discussed the prospect of 2021 last month.”

But according to Southfield consulting firm AlixPartners, the current chip deficit could cost the global auto industry $ 14.3 billion or more in revenue in the first quarter and $ 60.6 billion a year. The company says the damage may not be compensated for a year or two, depending on other economic factors that may affect the industry.

Wider impact

The impact on GM production extends beyond just these four plants. For example, at the end of February, 170 employees at Flint Engine Operations were laid off because their Small Gas engines had to be shut down due to a supply chain failure at other GM plants. At Flint, the union leader expects more cuts to be made due to shortages.

In addition, GM’s Spring Hill Assembly engine plant cut shifts on a single engine line as GM sends that engine to Fairfax, which remains down.

In addition, at the beginning of the week of February 8 in South Korea, GM launched its Bupyeong 2 assembly plant in half. where it sells in markets other than the United States

Workers representing UAW affected by the plant closures will continue to receive most of their salaries. The union is in talks to protect workers if a shortage of parts halts production of its contract, said Brian Rotenberg, UAW spokesman. Employees of the union will receive an additional salary ություն unemployment, which pays 75 և 80% և continuous benefits.

UAR is working with the Biden administration to develop an initiative policy to strengthen domestic supply chains. On February 24, President Biden signed an executive order to assist the auto industry by exploring ways to improve the supply chain and mitigate the effects of chip shortages.

“The current shortage of semiconductor automotive chips has disrupted automakers’ production plans and hurt workers,” Rotenberg said. “It’s a stark reminder of why we need to make the necessary manufacturing supplies needed for our economic well-being, health and national security in the United States.”

GM said CAMI Canada union workers, represented by Unifor, would be paid through the terms of their employment contracts, noting that senior workers would receive about 75% of their compensation in combination with unemployment benefits and additional benefits.

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