money Global chip shortage hits GM as automaker halts production on pickup trucks for a week
General Motors is set to suspend production of most of its full-size pickup trucks, due to the global computer chip shortage that has hit a range of industries.
The automaker’s assembly plant in Fort Wayne, Indiana will shut for a week beginning Monday, according to CNN.
Large pickups and SUVs are automakers’ best-selling and most profitable vehicles. GM and other manufacturers have tried to keep making them through the shortage, by shifting their supply of available chips away from other vehicles.
But as the Delta variant has caused new waves of Covid infections across the world, the supply chain has been thrown back into chaos.
"These most recent scheduling adjustments are being driven by temporary parts shortages caused by semiconductor supply constraints from international markets experiencing Covid-19-related restrictions," said GM in a statement. "We expect it to be a near-term issue."
Production will also be reduced at the Flint, Michigan assembly plant and halted at its Silao assembly plant in Mexico during the same week. The plants build various versions of GM’s Silverado and Sierra pickups.
The Covid-related supply chain issues have affected the industry in myriad ways. The pandemic has meant Toyota was forced to close three plants in Thailand and one in Japan, while Honda also will shut production at its main plant in Japan, reports Reuters.
A year ago, Covid lockdowns and restrictions meant car sales fell sharply. Automakers cut back their orders for chips and other parts, but sales rebounded faster than expected, leaving car companies without the chips they needed.
According to analysis by consultant AlixPartners, automakers will be forced to slash production by 3.9 million vehicles worldwide in 2021, which will cost them $110 billion in lost revenue.
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