GM to Significantly Cut North American Vehicle Production Due to Chip Shortage

John Gress | Reuters
  • General Motors said Thursday it's adding or extending downtimes at eight plants in the U.S., Canada and Mexico.
  • Impacted vehicles include GM's full-size and midsize pickup trucks, Chevrolet Blazer, GMC Terrain, among others.

DETROIT – General Motors is once again significantly cutting production at its North American plants due to the semiconductor chip shortage, signaling the global parts problem remains a serious issue for the automotive industry.

The automaker said Thursday it's adding or extending downtimes at eight plants in the U.S., Canada and Mexico. Most of the new cuts are for two weeks, while production of its Silverado 1500 and Sierra 1500 full-size pickups in Indiana and Mexico is expected to resume after a week of downtime starting Sept. 13.

Other vehicles impacted by the new production cuts range from its Chevrolet and GMC midsize pickups and vans in Missouri to the Chevrolet Trailblazer in Mexico and crossover production across North America.

"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," the company said in a statement Thursday.

The chip shortage has quickly grown from what many executives expected to be a short-term problem during the first half of the year to one that some anticipate will linger well into 2022.

GM last month said it expected production to be down by about 100,000 vehicles in North America during the second half of the year compared with the first six months. The company does not release production data, but it sold about 1.3 million vehicles during the first half of the year in North America.

Automakers, including GM, have declined to release new forecasts for how much they expect the parts problem to impact earnings due to the volatility of the situation. They previously forecast billions in losses due to the problem, much of which has been offset by record vehicle prices due to the low supply of autos.

The semiconductor chip shortage is expected to cost the global automotive industry $110 billion in revenue in 2021, according to a May forecast from consulting firm AlixPartners. 

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