US automotive giant General Motors will temporarily shut down almost all North American factories beginning Monday. The company pointed to a worldwide shortage of semiconductor chips as the cause for halting almost all production.
Almost All General Motors to Stop Production
General Motors announced that save from a few assembly plants, all other GM plants in North America will cease production in the meantime.
Notable exceptions include the Arlington assembly plant in Texas, which produces the company’s full-size SUVs. Also to continue work is the Flint Assembly in Michigan, which makes heavy-duty pickups.
The Bowling Green Assembly in Kentucky, which assembles Corvettes, also made the cut. Finally, the Lansing Grand River Assembly in Michigan, home to the Chevrolet Camaro and Cadillac Blackwing cars, will continue to stay open next week. All other plants will temporarily close the shop and will reopen on a staggered basis.
General Motors spokesman Dan Flores announced the temporary closures. He clarified that nearly all plants to close are due to the chip shortage. The only exception is the Orion Assembly, which shut down due to Chevy Bolt recall issues.
Global Chip Shortage Affecting Many Companies
It’s not just GM that’s experiencing problems with chip shortages. The entire automotive industry is suffering from the lack of available semiconductors.
Manufacturers prioritized delivery of their products to makers of electronic equipment used in remote work and remote learning such as laptops, mobile phones, and smart devices. This led to a worldwide backlog with car manufacturers taking a hit.
As a result, manufacturers had to temporarily idle production or build vehicles except for the parts that needed chips. As a result, new car inventory remained tight.
This also meant new car prices are now higher than usual. “COVID is driving supply constraints in countries that produce semiconductor chips,” Flores said. “But I can't say if it's because employees have a high rate of infection or if it's the government putting restrictions on plants due to the pandemic.”
Some Plants To Continue Work
With no end to the shortage in sight, some plants will continue work after a few days of shutdowns. Work will continue in plants such as Fort Wayne Assembly in Indiana and Silao Assembly in Mexico.
Flores said that GM will continue with other tasks even as production ceases. Mainly, the plants will continue assembling vehicles except for the parts that need chips to complete.
“During the downtime, we will repair and ship unfinished vehicles from many impacted plants, including Fort Wayne and Silao, to dealers to help meet the strong customer demand for our products.
Although the situation remains complex and very fluid, we remain confident in our team’s ability to continue finding creative solutions to minimize the impact on our highest-demand and capacity-constrained vehicles,” Flores said.
Staggered Reopening Schedules
Flores also disclosed the planned reopening schedules of the GM plants shuttered by the chip shortage. The Fort Wayne and Silao Assembly plants will take a week of downtime starting Monday but will resume regular production by September Sept. 13.
Others will stop production for two or three weeks before resuming work. “What we announced this morning is what we know now. I can't speculate if something will be announced next week or if there'll be additional impacts. We manage this on a day-to-day basis,” he added.
Watch the NBC News video reporting that General Motors will temporarily shut down most North American assembly plants due to chip shortage:
What do you think about the planned shutdowns of General Motors plants across North America? Do you agree it makes good business sense to do so?
Let us know what you think about the global chip shortages affecting automobile manufacturing. Share your thoughts below.