Amid the ongoing shortage of semiconductor chips, General Motors cut short overtime production at two of its assembly plants in the United States. These two plants of the GM manufacture highly profitable full-size pickups. The decision comes at a time when several industries, including the automobile, are facing a shortage of chips. The plants in Fort Wayne, Indiana, and Flint, Michigan produce full-size pickups like Chevrolet Silverado and GMC Sierra 1500 models. Their larger siblings to are produced here. This is for the first time when Detroit-headquartered automaker has cut production shifts for the above-mentioned vehicles.
The company had already reduced the production of vehicles at other car and crossover plants to maintain the required supply of chips. The company tried to prioritize the production of pickups as well as full-size SUVs. The company eliminated three overtime shifts at two of its plants. In addition to this, the company said that scheduled downtime for the weeks of June 28 and July 5 too have been canceled at all US. The carmaker said that it is expecting to make up for the lost production from the first half of the year during the summer shutdown period. GM and Ford have already announced that several plants in North America will either be made temporarily idle or shutdowns will be extended.
Ford CEO Jim Farley along with GM CEO Mary Barra is scheduled to attend a virtual summit with the Biden administration. The CEOs are expected to discuss the global shortage of semiconductors. The semiconductor chip is a very key component for automotive manufacturing units. They are used in a wide range of things like power steering, infotainment, braking systems, and others. Semiconductor suppliers shifted their supply to other industries after several plants were shut down last year. This created a shortage after the demand of consumers picked up. The shortage is mainly because the demand is much more than expected. General Motors believe that shortage of chip will reduce its operating profit by around 1.5 billion. Similarly, the earnings of Ford could be lowered by USD 1 to 2.5 billion this year.