GM to close 3 factories due to semiconductor shortage

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General Motors has ordered three factories to shut down and slowed production to a fourth as it grapples with a global semiconductor shortage.

The Detroit automaker has said its production targets for 2021 are threatened as a result.

Factories in Kansas in the United States, Ontario in Canada and San Luis Potosí in Mexico will close next week, he said on Wednesday, and will operate its Bupyeong, South Korea plant at half of its usual production capacity. He plans to release weekly updates after that, adding that he intends to do as much production as possible.

“The semiconductor supply for the global automotive industry remains very fluid,” GM said. “We are currently evaluating the overall impact, but our goal is to continue producing our most demanded products, including full-size trucks and and Corvettes – for our customers. ”

Bigger vehicles like trucks and SUVs are important to the North American market, as they typically make higher profits than cars and have sold better during the pandemic.

The company reported last month that it was feeling the effect of limited power supply for semiconductors. Chips have dozens of uses in vehicles, including sensors for power steering and brakes, and in entertainment systems, and they are increasingly in demand as automakers expand their offering of electric vehicles. But chipmakers prefer to sell their product to consumer electronics makers, who pay more.

GM has increased its commitment to electric vehicles over the past year. It plans to invest $ 27 billion in the development of electric vehicles and to sell 1 million electric vehicles in 2025. Last month, the company announced it would stop selling vehicles that run on gasoline or diesel. by 2035, making it the first automaker to set a benchmark for ending sales of cars and trucks with internal combustion engines.

The company said the supply issues will not affect its plans for further development and production of electric vehicles, and will provide more details on the impact of the semiconductor shortage when released. of his results next week.

A growing list of automakers have said they are cutting production and workers on leave. Nomura estimated last month that global car production could be around 20% lower than companies expected in the first quarter.

GM vehicles affected by the shutdowns include the Cadillac XT4, Chevrolet Malibu, Equinox and Trax, Buick Encore, Holden Trax, and Opel / Vauxhall Mokka.

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