DETROIT – General Motors is extending shutdowns at plants in Kansas, Canada and Mexico due to a semiconductor shortage.
GM announced Wednesday it will extend downtime at San Luis Potosi (Mexico) through the end of March, and at Fairfax (Kansas) and CAMI (Canada) to at least mid-April. The automaker added that its Gravatai plant in Brazil will take downtime in April and May.
“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs for our customers,” reads a statement from the Detroit automaker. “GM has not taken downtime or reduced shifts at any of its truck plants due to the shortage. We continue to work closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impacts on GM.”
The semiconductor automotive chip shortage has disrupted production plans for automakers around the world. General Motors has warned that it is likely to lose around $2 billion this year as a result.
“Our intent is to make up as much production lost at these plants as possible. We contemplated this downtime when we discussed our outlook for 2021 last month,” reads the statement from GM on Wednesday.
Ford had to slow down the F-150 production for a week. The shortage is now spreading across to other industries.
For the auto industry the problem is a supply and demand issue created by manufacturing. Because of the issue many automakers are having to slow or stop production to put the chips in vehicles.
GM had to shut down its Fairfax, Kansas plant that builds the Cadillac XT4 and the Chevy Malibu. It also closed the Cami assembly plant in Canada where they build the Chevy Equinox.
What caused the semiconductor shortage?
Industry officials said semiconductor companies diverted production to consumer electronics during the worst of the COVID-19 slowdown in auto sales last spring. Global automakers were forced to close plants to prevent the spread of the virus. When automakers recovered, there weren’t enough chips.
It takes six to nine months of lead time for the industry to get chips via a complex web of suppliers, Kristin Dziczek, vice president of industry at the Center for Automotive Research, told the AP in January.