June 25, 2021

Gp Delivers1

The excellent automotive artisans1

GM, Honda extend production suspensions at some North American plants

DETROIT/WASHINGTON — General Motors extended production cuts in North America on Wednesday due to a worldwide semiconductor chip shortage that has impacted the auto sector.

GM’s action followed a similar announcement Tuesday by Honda Motor Co., which said it will extend production suspensions at some North American plants into the week of March 29 due to the chip shortage and other supply chain issues.

The U.S. automaker said its Wentzville, Mo., assembly plant would be idled during the weeks beginning March 29 and April 5. It will extend down time at its plant in Lansing, Mich., which has been idled since March 15, by two weeks.

The action was factored into GM’s prior forecast that it could shave up to $2 billion off this year’s profit, spokesman David Barnas said. GM did not disclose how much volume would be lost by the move, but said it intended to make up as much lost production as possible later in the year.

The chip shortage came as North American auto plants were shut for two months during the COVID-19 pandemic last year and chip orders were canceled, and as demand surged from the consumer electronics industry as people worked from home and played video games. That’s now left carmakers competing for chips.

Semiconductors are used extensively in cars, including to monitor engine performance, manage steering or automatic windows, and in sensors used in parking and entertainment systems.

Vehicles affected by the GM production cuts include the midsize pickup trucks Chevrolet Colorado and GMC Canyon in Missouri, and the Cadillac CT4 and CT5 and Chevy Camaro cars in Michigan.

Meanwhile, GM said its San Luis Potosi, Mexico, assembly plant, idled since Feb. 8, will resume production with two shifts beginning the week of April 5. Last week, GM said it was building certain 2021 light-duty full-size pickups without a fuel management module, hurting their fuel economy performance by one mile per gallon.

Also on Wednesday, Ford Motor Co. said it would cut output this week of the Transit van at its Kansas City, Mo., assembly plant due to the shortage. Production of the flagship F-150 pickup at the plant is not affected.

Ford and Stellantis have said they would partially assemble and park their large pickups to finish later when chip supplies allow.

Stellantis, the world’s fourth-largest automaker, said it will build and hold for final assembly its Ram 1500 Classic trucks at its Warren, Mich., and Saltillo, Mexico, assembly plants. When chips become available, the vehicles will be completed and shipped to dealers.

Exacerbating the shortage is a recent fire at a Renesas Electronics Corp. chip plant in Japan. Barnas said GM was assessing the impact of the blaze. Ford is doing the same, while Stellantis and Mazda said their operations have not yet been affected.

German auto supplier Continental said it was assessing the impact of the fire and was in “daily contact” with Renesas.

“We are considering all possible measures, including the evaluation of other alternative technical solutions,” Continental said in a statement.

Honda issues

Meanwhile, Honda last week said a variety of issues would force it to halt production at a majority of North American plants for the entire week of March 22 and impact production at the remainder of its North American plants.

Honda cited “impact from COVID-19, congestion at various ports, the microchip shortage and severe winter weather” for the production cuts.

Last week, Toyota Motor Corp. said it was cutting production at four plants in Kentucky, West Virginia and Mexico, citing “a shortage of petrochemicals” and “recent severe weather conditions” affecting production.

Stellantis warned Saturday its highly profitable pickup trucks were hit by the issue, while Ford said it would cut more U.S. production.