Trucks roll off the assembly line at the GM Chevrolet Silverado and GMC Sierra GM pickup plant in Fort Wayne, Indiana on July 25, 2018.
John Gress | Reuters
DETROIT – General Motors will cease most US and Mexican production of its profitable full-size pickup trucks next week due to the ongoing global semiconductor die shortage.
The Detroit automaker confirmed production cuts for plants in Michigan, Indiana and Mexico that produce the Chevrolet Silverado and GMC Sierra pickups on Wednesday.
GM has avoided shutting down production of its large pickups this year due to parts shortages caused by aggressive supply chain tactics and the construction of some vehicles without the chips needed to be finished later. It also cut down on some features that require chips, such as wireless phone chargers.
“The global semiconductor scarcity remains complex and very fluid, but GM’s global purchasing and supply chain, engineering and manufacturing teams continue to find creative solutions and work with the supply base to determine the impact on our most demanded and limited capacity vehicles including full-size trucks and SUVs for our customers, “the company said in an email statement.
The cuts include temporarily halting production next week at GM’s Fort Wayne, Indiana, assembly plant and its Silao, Mexico assembly plant. The Flint Assembly plant in Michigan, which builds heavy trucks, will also be reduced from three shifts to one shift. Full production at the plants is expected to resume in the week of August 2nd, GM said.
The origin of the shortage is at the beginning of last year when Covid caused rolling shutdowns of vehicle assembly plants. When the facilities closed, the wafer and chip suppliers were redirecting the parts to other sectors, such as consumer electronics, which shouldn’t be affected as much by the stay-at-home orders.
The problem is expected to cost the global auto industry $ 110 billion in sales in 2021 Consulting firm AlixPartners.