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July 22, 2021

Chip shortage hits profitable GM trucks

The automaker has to stop output of some of its most profitable vehicles.

By Graeme Roberts

General Motors will stop most US and Mexican output of its profitable full-size pickup trucks next week due to the ongoing global shortage of microprocessors, a US media report said.

The automaker confirmed the production cuts to CNBC.com for factories in Michigan, Indiana and Mexico building the Chevrolet Silverado and GMC Sierra pickups.

The report noted GM had avoided output halts of its large pickups during 2021 through aggressive supply chain tactics as well as building some vehicles without the needed chips which would be completed later. It also has eliminated some features, such as wireless phone chargers, which require chips.

“The global semiconductor shortage remains complex and very fluid, but GM’s global purchasing and supply chain, engineering and manufacturing teams continue to find creative solutions and make strides working with the supply base to minimise the impact to our highest-demand and capacity-constrained vehicles, including full-size trucks and SUVs for our customers,” the company said in a statement emailed to CNBC.com.

The cuts will occur at the Fort Wayne Assembly plant in Indiana and an assembly plant in Silao, Mexico. Flint Assembly in Michigan, where heavy-duty trucks are built, will reduce from three to one shift.

Full production at the plants is expected to resume in the week of 2 August, GM told CNBC.com.

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