Line workers work on the chassis of full-size General Motors pickups at the Flint Assembly facility in Flint, Michigan on June 12, 2019.
JEFF KOWALSKY / AFP / Getty Images
General Motors This weekend is reducing overtime production at two U.S. assembly plants that are making their highly profitable, full-size pickups due to the ongoing shortage of semiconductor chips affecting the global automotive industry.
The plants in Flint, Michigan and Fort Wayne, Indiana make a mix of full-size pickups, including the Chevrolet Silverado and GMC Sierra 1500 and their larger siblings.
This is the first time the Detroit automaker has cut production delays on its full-size pickups due to months of chip shortages. GM has reduced production significantly Auto and crossover systems in North America to prioritize chips for the company’s pickups as well as full-size SUVs.
In total, GM eliminated three hours of overtime between the two plants on Saturday and Sunday.
“As we continue to control the impact of semiconductors on our assets, we balance availability of parts with our ability to operate efficiently throughout the week,” GM said in a statement it emailed.
GM also produces the 1500 versions of the Silverado and Sierra pickups at a plant in Mexico.
In addition to the shift cuts, GM said Friday that scheduled downtime for the weeks of June 28 and July 5 will be canceled at all US plants except one midsize truck plant in Missouri. GM hopes that production during these weeks, traditionally referred to as summer downtime, will help make up for lost production starting in the first half of the year.
GM CEO Mary Barra and Ford CEO Jim Farley are expected to attend one on Monday virtual CEO summit to discuss the global semiconductor shortage with the Biden administration.
Semiconductors are key components in automotive engineering and are used in, among other things, infotainment, power steering and braking systems. Since several plants were closed last year due to CovidSuppliers have moved semiconductors from automakers to other industries, creating a shortage after consumer demand fell more sharply than expected. The auto parts may contain different sizes and different types of chips.
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 predicts the chip shortage will cut operating profits by $ 1.5 billion to $ 2 billion this year, while Ford said the situation could cut profits by $ 1 to 2.5 billion by 2021.
The consulting firm AlixPartners estimates that the shortage of chips will decrease $ 60.6 billion Sales in the global automotive industry this year.