Automobile

GM idling 8 plants, Ford halting pickup line as chip shortage worsens

DETROIT — The global shortage of computer chips is getting worse, forcing automakers to temporarily close factories including those that build popular pickup trucks.

General Motors announced Thursday that it will pause production at North American plants during the next two weeks, including two that make the company’s top-selling Chevrolet Silverado pickup. The largest U.S. automaker will halt production next week at its Fort Wayne plant in Indiana and its Silao plant in Mexico, both of which build pickup trucks. In total, GM is cutting production at eight North American assembly plants in September. 

Ford will stop making pickups at its Kansas City Assembly Plant for the next two weeks. Shifts will be cut at two more truck plants in Dearborn, Michigan, and Louisville, Kentucky.

Toyota Motor Corp said last month it will slash global production for September by 40% from its previous plan.

In addition to Fort Wayne and Silao, GM will halt production at its Wentzville, Missouri, plant for two weeks starting Sept. 6 that builds midsize trucks and full-size vans. GM will also halt production at the CAMI Assembly in Canada and San Luis Potosi Assembly in Mexico for two additional weeks, through the week of Sept. 27. The company builds its Equinox SUV at both plants. Production of the Equinox has been down since Aug. 16.

GM is also idling production for two additional weeks at its Lansing Delta Township plant that builds the Chevrolet Traverse and the Buick Enclave. GM’s Spring Hill Tennessee plant will cut two weeks of production in September; it builds the GMC Acadia, Cadillac XT5 and Cadillac XT6, while its Ramos, Mexico plant will take two additional weeks of downtime for Blazer production, thru the week of Sept. 27. 

GM said during production downtime it will repair and ship unfinished vehicles from many impacted plants, including Fort Wayne and Silao. 

The cuts will compound an already short supply of cars, trucks and SUVs on dealer lots nationwide that have pushed prices to record levels. Automakers reported that U.S. dealers had just under a million new vehicles on their lots in August, less than a third of the 3.58 million in August 2019.

“It now appears to be accelerating in the wrong direction,” said Jeff Schuster, president of global vehicle forecasting for LMC Automotive, a consulting firm.

Industry analysts say the delta variant of the novel coronavirus has hit employees at chip factories in southeast Asia hard, forcing some plants to close. That’s worsened a chip shortage that was starting to improve earlier in the summer.

“Now the prospects for new sales for the rest of the year continue to dim with the reality that tight inventory will last well into 2022,” said Kevin Roberts, director of industry insights for Cargurus.com.

Demand for trucks, SUVs and other autos is strong, but buyers are growing frustrated due to lack of inventory and high prices. U.S. light vehicle sales fell nearly 18% in August compared with a year ago, while the average vehicle sale price hit over $41,000, a record, according to J.D. Power.

Sales of Ford’s F-Series trucks fell nearly 23% for the month.

The August sales dip and inventory shortages prompted Schuster to cut his U.S. sales forecast for the year to 15.7 million. Until the pandemic hit, sales had been running around 17 million per year.

Consumers who need a new vehicle don’t have many choices with dealer supplies so short, Schuster said. Some have left the market because they can’t find anything that meets their needs. For others, “pricing is through the roof, so they can’t afford it and aren’t willing to spend what it’s going to cost to get that vehicle.”

Includes information from Reuters.

 


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