General Motors will temporarily halt production at three factories and cut output by half at a fourth due to the global shortage of semiconductors, the auto giant said Wednesday.
Starting next week, GM will suspend output at a US factory in Kansas, another in the Canadian province of Ontario and a third in San Luis Potosi, Mexico. A plant in South Korea will be run at half capacity.
The announcement is the latest ripple effect of a global supply crunch that stemmed in part from outsized chip demand for game consoles and other consumer electronics during the coronavirus pandemic.
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GM described supplies for chips as “very fluid,” adding that despite efforts to mitigate the fallout, “the semiconductor shortage will impact GM production in 2021,” according to a news release.
“We are currently assessing the overall impact, but our focus is to keep producing our most in-demand products — including full-size trucks and SUVs and Corvettes.”
The chip shortage is slamming GM. The auto maker is suspending production at three North American plants and cutting output at a South Korean site because of hte lack of semiconductors. https://t.co/W72UNTcWO7 via @WSJ
— Paul Page (@PaulPage) February 3, 2021
Unionized staff at GM plants in the United States and Canada will continue to receive benefits guaranteed under their contracts, generally around 75 percent of their pay, a GM spokesman told AFP.
IHS Markit said in a January 13 note that the biggest disruption due to the supply crunch was in Mainland China, where vehicle output could drop by 250,000 units in the first quarter.
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Europe could lose 100,000 units in the quarter, with the supply effects also hitting North America, Japan and India, IHS said.