General Motors Co said on Wednesday it was further extending production cuts at three North American plants and adding a fourth to the list of factories hit by the global semiconductor chip shortage.
The extended cuts do not change GM’s forecast last month that the shortage could shave up to $2 billion from this year’s earnings. GM Chief Financial Officer Paul Jacobson subsequently said chip supplies should return to normal rates by the second half of the year and he was confident the profit hit would not worsen.
The US automaker did not disclose the impact on volumes or say which supplier or parts were affected by the chip shortage, but said it intends to recover as much of the lost output as possible.
“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs,” GM spokesman David Barnas said. “We contemplated this downtime when we discussed our outlook for 2021.”
The chip shortage, which has hit automakers globally, stems from a confluence of factors as carmakers, which shut plants for two months during the Covid-19 pandemic last year, compete against the sprawling consumer electronics industry for chip supplies.
Consumers have stocked up on laptops, gaming consoles and other electronic products during the pandemic, leading to tight chip supplies. They also bought more cars than industry officials expected last spring, further straining supplies.
The Detroit automaker had previously extended production cuts at three North American plants into mid-March and said vehicles at two other plants would only be partially built.
Published in The Express Tribune, March 4th, 2021.
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