GM closes plants in the United States, Mexico and Canada due to chip crisis

GM announced this Thursday (2) that it will temporarily stop production at eight factories in North America due to the crisis of semiconductor chips. Among the plants affected by the measure are Fort Wayne, in the state of Indiana (USA), and Silao, in Mexico, both responsible for manufacturing Chevrolet Silverado, the automaker’s best-selling pickup in the United States.

“During downtime, we will repair and ship unfinished vehicles from some impacted plants, such as Fort Wayne and Silao (Mexico), to dealerships to help us understand customer demand,” said a spokesperson for the automaker, via e- mail, to The Verge website.

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“The situation remains complex and fluid, but we are confident in our ability to find creative solutions to minimize the impact [da crise] in our most demanding and capacity-constrained vehicles.”

Chevrolet factory in São Caetano do Sul (SP);  semiconductors affect car production.  Image: Disclosure/GM
Chevrolet factory in São Caetano do Sul (SP); semiconductors also affected car production in Brazil. (Image: Disclosure/GM)

In the US, production will still be halted at the plants in Wentzville, Missouri; Spring Hill, Tennessee; and Lansing, Michigan. Three other plants in Mexico and Canada will also be stopped.

Among the list of affected vehicles are models produced by Chevrolet (Silverado, Cheyenne, Traverse, Equinox and Express), GMC (Acadia, Sierra, Savana and Terrain), Buick (Enclave) and Cadillac (XT5 and XT6).

Crisis could cost the automaker $2 billion

This is the second time in 2021 that GM has temporarily closed part of its plants in the United States. In February, the largest automaker in the country even shut down its plants in the state of Kansas for two weeks. In Brazil, in June, the production of the Chevrolet Onix was also compromised due to the shortage of semiconductors.

GM has yet to specify the exact size of the production loss due to the chip crisis. However, company CEO Mary Barra explained during a recent earnings conference that purchasing, manufacturing, engineering and sales teams are shifting chips from smaller cars and SUVs to pickup trucks, larger SUVs and electric vehicles. At the same event, the conclusion was reached that the interruption should cost between US$1.5 billion and US$2 billion (taxes not included) in the company’s profit revenue.

It is worth remembering that the episode with GM is not an isolated case. Most of the automakers in the world, including Volkswagen and Ford, had to temporarily close a portion of their factories.

Even Tesla, which has a smaller production volume, will delay the Roadster’s launch to 2023 because of the shortage of chips. “The global shortage situation remains very serious,” company CEO Elon Musk said during a recent earnings conference call.

Via The Verge

Cover Image: Linda Parton/Shutterstock

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