General Motors will halt production next week of most of its lucrative full-size pickup trucks in the United States and Mexico because of an ongoing worldwide shortage of semiconductor chips.
The Detroit-based automaker confirmed production cuts Wednesday at plants in Michigan, Indiana and Mexico that make the Chevrolet Silverado and GMC Sierra pickups.
GM avoided stopping production of its big pickups this year because of parts shortages through aggressive supply chain tactics and building some vehicles without the necessary chips to be completed later . He also cut back on some features that require chips, such as wireless phone chargers.
“The global semiconductor shortage remains complex and very volatile, but GM’s global purchasing and supply chain, engineering and manufacturing teams continue to find creative solutions and make progress by working with the supply base to minimize the impact on our highest-demand vehicles and limited capabilities , including full-size trucks and SUVs for our customers,” the company said in a statement.
The cuts include a temporary production shutdown next week at GM’s Fort Wayne, Indiana, assembly plant and its Silao, Mexico, assembly plant. Its Flint Assembly plant in Michigan, which makes heavy trucks, will also be reduced to one shift from three shifts. Full production at the plants is expected to resume Aug. 2, GM said.
The shortage arose early last year when Covid caused the shutdown of auto assembly plants. When the plants shut down, suppliers of wafers and chips diverted parts to other sectors, such as consumer electronics, which were not expected to be affected by the housekeeping orders.
The problem will cost the global auto industry $110 billion in revenue in 2021, according to consulting firm AlixPartners .