GM, Ford halt some production as chip shortage worsens
General Motors announced on Sept. 2 that it would pause production at eight of its 15 North American assembly plants during the next two weeks.
Technology / IIoT
The global shortage of computer chips is getting worse, forcing automakers to temporarily close factories including those that build popular pickup trucks.
General Motors announced on Sept. 2 that it would pause production at eight of its 15 North American assembly plants during the next two weeks, including two that make the company’s top-selling Chevrolet Silverado pickup.
Ford will stop making pickups at its Kansas City Assembly Plant for the next two weeks. Shifts will be cut at two more truck plants in Dearborn, Michigan, and Louisville, Kentucky.
The cuts will compound an already short supply of cars, trucks and SUVs on dealer lots nationwide that have pushed prices to record levels. Automakers reported that U.S. dealers had just under a million new vehicles on their lots in August, 72% lower than the 3.58 million in August of 2019.
“It now appears to be accelerating in the wrong direction,” said Jeff Schuster, president of global vehicle forecasting for LMC Automotive, a consulting firm.
Industry analysts say the delta variant of the novel coronavirus has hit employees at chip factories in southeast Asia hard, forcing some plants to close. That’s worsened a chip shortage that was starting to improve earlier in the summer.
“Now the prospects for new sales for the rest of the year continue to dim with the reality that tight inventory will last well into 2022,” said Kevin Roberts, director of industry insights for Cargurus.com.
Demand for trucks, SUVs and other autos is strong, but buyers are growing frustrated due to lack of inventory and high prices. U.S. light vehicle sales fell nearly 18% in August compared with a year ago, while the average vehicle sale price hit over $41,000, a record, according to J.D. Power.
Sales of Ford’s F-Series trucks fell nearly 23% for the month.
GM is shutting down pickup truck plants in Fort Wayne, Indiana, and Silao, Mexico, for a week starting Sept. 6. A plant in Wentzville, Missouri, that builds midsize pickups and big vans will close for two weeks. Other plants that make small and midsize SUVs will be idled for two weeks or longer.
“These recent scheduling adjustments are being driven by the continued parts shortages caused by semiconductor supply constraints from international markets experiencing COVID-19-related restrictions,” GM said in a statement.
The GM and Ford cuts come on top of temporary plant closures announced previously by Toyota, Nissan and Stellantis, formerly Fiat Chrysler.
There is a little good news. Ford said its overall production rose to nearly 80% from July to August, although it’s not clear how long that would last.