GM to pause production at most North American plants amid chip shortage

Chip shortage causes major slowdown issues for automotive industry

The Big Three are planning massive plant shut downs due to the ongoing chip shortage.
The Big Three are planning massive plant shut downs due to the ongoing chip shortage.

DETROIT – The Big Three are planning massive plant shut downs due to the ongoing chip shortage.

At GM, it impacts nearly all of its plants in North America -- including Michigan.

As the chip shortage continues, the losses are racking up. General Motors has 13 North American assembly plants and nine will be closed for the next few weeks.

Read: GM, Ford halt some production as chip shortage worsens

It takes six months to get a chip produced before it gets tested, packaged and shipped. COVID cases in Malaysia are slowing down the packaging and shipping process, forcing GM into extending its existing shutdowns and creating additional new closures.

Read: Computer chip shortage continues to plague the Big Three, auto industry

Guidehouse Insights auto analyst Sam Abuelsamid said there is no good news on the horizon.

“It’s a signal that this is a problem that is not going to be resolved for at least probably the next six months,” Abuelsamid said.

Ford Motor Company is closing its Kansas City F-150 plant and production has been significantly slowed at its Kentucky and Dearborn truck plants.

The plants produce the company’s most profitable vehicles that are still in high-demand and short-supply. The fact that the companies are not building them makes for an exceptionally expensive supply chain problem.

“By the time this is all said and done, the total may well reach into the tens of billions,” Abuelsamid estimates.

Stellantis also has several of its plants closed or preparing to close.

More: Automotive


About the Authors:

Rod Meloni is an Emmy Award-winning Business Editor on Local 4 News and a Certified Financial Planner™ Professional.

Dane is a producer and media enthusiast. He previously worked freelance video production and writing jobs in Michigan, Georgia and Massachusetts. Dane graduated from the Specs Howard School of Media Arts.