The engines were assembled en route down the assembly line at General Motors (GM) manufacturing facility in Spring Hill, Tennessee, on August 22, 2019.
Harrison McClary | Reuters
DETROIT – General Motors and Ford engine At several plants in North America, temporary idle downtimes are being carried out or extended as this has not yet been completed Shortage of semiconductor chips Impact on the global automotive industry.
For GM, the temporary plant closings range from one to two weeks to several additional weeks for systems that have already been idle due to the part malfunction. GM will resume production of midsize pickups on Monday after a two-week shutdown due to the shortage at a Missouri facility.
Ford’s updated plans include additional downtime at two plants in Illinois and Missouri through next week and the temporary closure of the Flat Rock Assembly plant in Michigan for a week starting Monday. Affected vehicles are the Ford Explorer and Lincoln Aviator, Ford Mustang and Transit Van SUVs.
Semiconductors are key components that are used in, among other things, infotainment, power steering and braking systems. With multiple plants closed due to Covid last year, suppliers turned semiconductors away from automakers and into other industries, creating a shortage after consumer demand fell more than expected.
The consulting firm AlixPartners estimates that the shortage of chips will decrease $ 60.6 billion Sales in the global automotive industry this year.
Ford had already announced Production cuts in six plants last week including facilities making their popular F-150 pickup in Michigan by next week.
The company had also previously canceled overtime at its Chicago assembly plant, which makes SUVs, and the Kansas City assembly plant for van production, but did not completely cease production. It said Thursday it will also cut the production schedule at its Ohio assembly plant, where it builds large trucks and chassis cabs.
Ford previously expected the shortage could lower its profits by $ 1 billion to $ 2.5 billion Without issuing any new guidance, the company announced that it will “provide an update on the financial impact of the semiconductor shortage” when it releases its first quarter results on April 28.
“The Ford team continues to work to find solutions to the industry-wide global semiconductor shortage,” the company said in a statement it emailed. “For example, we plan to have more US assembly plants in more weeks this summer than in more than 15 years so we can build our must-have vehicles for dealers and customers.”
GM said the cost of the closings had been taken into account Company profit forecast for the year according to GM. The automaker believes the problem will lessen Operating profit this year increased by $ 1.5 billion to $ 2 billion.
“We continue to work closely with our supply base to find solutions to our suppliers’ semiconductor needs and to reduce the impact on GM,” said GM in a statement sent via email. “Our intention is to make up for as much production loss as possible in these plants.”
GM’s Spring Hill, Tennessee plant will close Saturday through April 23, according to a notice from the United Auto Workers union to workers received from CNBC. The system builds the crossovers GMC Acadia and Cadillac XT5 and XT6. GM confirmed the shutdown.
In addition, GM said another crossover facility producing the Chevrolet Traverse and Buick Enclave near Lansing, Michigan will be shut down in the week of April 19, and production of the Chevrolet Blazer will be stopped at a plant in Mexico in this week will also be discontinued.
GM is also extending downtime at plants in Kansas and Canada, which will manufacture cars and crossovers through mid-May. They produce the Chevrolet Malibu sedan and Equinox and Cadillac XT4 crossovers. At another plant in Lansing, which manufactures the Chevrolet Camaro and the Cadillac CT4 and CT5, the downtime has been extended by two weeks to the first week of May.
For months, GM and Ford have been prioritizing assembly or similarf high-margin vehicles like full size pickups by reducing the production of cars and crossovers. The companies are even partially building pickups to finish them off and send it at a later date.
GM was forced to cut production the mid-size pickups Chevrolet Colorado and GMC Canyon two weeks long. According to GM, the production of the smaller trucks will resume on Monday.
GM said Adjusted pre-tax profit is expected this year to reach $ 10-11 billion, or $ 4.50-5.25 per share. The automotive sector is projected to have adjusted free cash flow of $ 1 billion to $ 2 billion in 2021. The projections take into account the potential impact of chip scarcity, including a $ 1.5 billion to $ 2.5 billion impact on free cash flow.
GM CFO Paul Jacobson said he was last week “increasingly self-confident” The automaker would meet its profit targets for the year despite the plant closings.