Computer chip shortage starting to hit automakers where it hurts

The firm introduced it will shut manufacturing at two US plants — in Spring Hill, Tennessee, and Lansing Delta Township, Michigan, within the coming weeks. GM additionally prolonged shutdowns on the Fairfax Assembly plant in Kansas City, Kansas, and the CAMI plant in Ingersoll, Ontario, which have each been idled since February 8. And it can proceed the shutdown on the Lansing Grand River meeting plant, which has been down since March 15.

In addition, GM is halting Chevrolet Blazer manufacturing on the Ramos Assembly plant in Ramos, Mexico, in the course of the week of April 19, though that plant will proceed to construct the Chevy Equinox.

GM is bringing some plants again on-line as it tries to keep away from shortages of sure autos in its supplier inventories. The meeting plant in Wentzville, Ohio, which makes midsize pickup vehicles, will resume manufacturing this coming Monday. It has been down since March 29. And this previous Monday, the plant in San Luis Potosi, Mexico, restarted manufacturing of Equinox and GMC Terrain.

But provides of autos at dealerships are getting extraordinarily tight, in accordance to business specialists. GM (GM) reported final week that its inventory of autos on the finish of March was down 18% from the top of 2020.

“We are seeing levels of … inventory tightness that goes beyond anything we have ever seen,” wrote Morgan Stanley auto analyst Adam Jonas in a word to shoppers Thursday. He mentioned that for some autos, prospects are having to pay above sticker worth, reasonably than lower than sticker worth.

The chip scarcity has grow to be a growing problem for major automakers around the globe, with plants in North America, Asia and Europe all briefly shutting down manufacturing.
Computer chip shortage starting to hit automakers where it hurtsComputer chip shortage starting to hit automakers where it hurts
Automakers reduce laptop chip orders early final yr when the pandemic precipitated temporary plant closures and slammed the brakes on auto sales and manufacturing. Electronics producers, which loved strong sales in the course of the pandemic, fortunately snapped up the surplus provide.
But when car sales bounced back prior to anticipated, it left the business fighting a chip scarcity.

GM has already warned that full-year earnings may very well be minimize by between $1.5 billion to $2 billion due to the chip scarcity. It mentioned these newest plant shutdown plans are in keeping with that earlier revenue steering.

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