Home Electronic production GM, Ford halt part of production as chip shortage worsens

GM, Ford halt part of production as chip shortage worsens

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The global shortage of computer chips is worsening, forcing automakers to temporarily shut down factories, including those that make popular pickup trucks. General Motors announced Thursday that it will halt production at eight of its 15 North American assembly plants over the next two weeks, including two that make the company’s best-selling Chevrolet Silverado pickup.

Ford will stop making pickup trucks at its Kansas City assembly plant over the next two weeks. Shifts will be cut at two other truck plants in Dearborn, Michigan, and Louisville, Kentucky. The cuts will worsen an already limited supply of cars, trucks and SUVs on dealer lots nationwide, pushing prices to record highs. Automakers reported that U.S. dealerships had just under one million new vehicles on their lots in August, down 72% from 3.58 million in August 2019.

Ford F-150 2021 Truck. Source: Ford

“It now appears to be accelerating in the wrong direction,” said Jeff Schuster, president of global vehicle forecasts for LMC Automotive, a consulting firm.

Industry analysts say the delta variant of the novel coronavirus has hit workers at chip factories in Southeast Asia hard, forcing some factories to close. This compounded a flea shortage that was starting to improve in early summer.

“Now the outlook for new sales for the rest of the year continues to darken with the reality that a tight inventory will last until 2022,” said Kevin Roberts, director of industry information for Cargurus. com.

Buyers are increasingly frustrated with the lack of inventory

The demand for trucks, SUVs and other cars is high, but buyers are increasingly frustrated due to lack of inventory and high prices. Light-duty vehicle sales in the United States fell nearly 18% in August from a year ago, while the average vehicle selling price reached over $ 41,000, a record, according to JD Power . Ford’s F-series truck sales fell nearly 23% for the month.

Falling August sales and inventory shortages prompted Schuster to lower its U.S. sales forecast for the year to $ 15.7 million. Until the pandemic hit, sales were around 17 million a year. Consumers who need a new vehicle don’t have much choice with such short dealer supplies, Schuster said. Some have left the market because they cannot find anything that meets their needs. For others, “the prices are outrageous, so they cannot afford it and are not willing to spend what it costs to get this vehicle.”

GM is closing pickup truck plants in Fort Wayne, Indiana and Silao, Mexico for a week starting Monday. A factory in Wentzville, Missouri, which manufactures midsize pickup trucks and large vans, will shut down for two weeks. Other factories that make small and mid-size SUVs will be idle for two weeks or more.

Windsor minivan plant down for two weeks

“These recent schedule adjustments are driven by continued parts shortages caused by semiconductor supply constraints to international markets facing COVID-19-related restrictions,” GM said in a statement.

GM and Ford’s cuts come on top of temporary plant closures previously announced by Toyota, Nissan and Stellantis, formerly Fiat Chrysler. Stellantis closed its Ram truck assembly plant in Sterling Heights, Mich., This week due to the chip shortage. The small SUV plant in Belvidere, Illinois, and a minivan plant in Windsor, Ont., Have been down for two weeks.

Toyota has announced that it will cut production by at least 40% in Japan and North America over the next two months, reducing production to 360,000 vehicles worldwide for the month of September alone. Nissan, which announced in mid-August that chip shortages would force it to shut down its massive Smyrna, Tennessee plant for two weeks until August 30, now says the shutdown will last for four weeks, until the 13th. September. good news. Ford said its overall production hit nearly 80 percent from July through August, although it’s not clear how long that will last.

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