General Motors reportedly said Wednesday (3 March) it was further extending production cuts at three North American plants and adding a fourth due to the worldwide semiconductor chip shortage.
Reuters reported the extended cuts did not change GM's forecast last month the shortage could cut up to US$2bn from the 2021 profit.
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The news agency cited GM CFO as saying, subsequently, 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 report added GM did not disclose the impact on volume or say which supplier or parts were affected by the chip shortage but added it intended 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 told Reuters. "We contemplated this downtime when we discussed our outlook for 2021."
According to the report, GM said it would extend downtime at plants in Fairfax, Kansas, and Ingersoll, Ontario, to at least mid-April, and in San Luis Potosi, Mexico, until the end of March. It will also idle the Gravatai plant in Sao Paulo, Brazil, in April and May.
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By GlobalDataReuters noted the 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.
Following Wednesday's cuts, forecasting firm AutoForecast Solutions estimated GM could lose more than 216,000 units globally due to the shortage, the report added.
Reuters also noted Ford last month said the lack of chips could cut company production by up to 20% in the first quarter and hurt profits by as much as $2.5bn. It had previously cut production of its top-selling F-150 pickup truck.
Stellantis said Wednesday the chip shortage could weigh on 2021 results.
Some automakers, including Toyota and Hyundai, avoided deeper cuts by stockpiling chips ahead of the shortage, Reuters added.
It noted industry officials and politicians had pushed president Joe Biden's administration to take a more active role in dealing with the chip shortage.
Last week, Biden said he would seek $37bn in funding to supercharge US chip manufacturing. An executive order also launched a review of supply chains for such critical products as semiconductor chips, electric vehicle batteries and rare earth minerals.
Complicating matters was a severe winter storm in Texas last month that killed at least 21 people and led to the shutdown of several chip plants, Reuters said. Semiconductor industry officials told the news agency customers would face knock-on effects in several months.
