Chip woes: GM, Ford pause more production for deepening shortage

Kalea Hall
The Detroit News

Detroit — Automakers are making more production adjustments and cancellations this week as they continue to grapple with a semiconductor shortage costing valuable manufacturing time and eating into automakers' potential profits.

General Motors Co. is restarting its midsize truck production next week after two weeks down, the automaker said Thursday. But it will halt some production at three new plants and has extended downtime at others.  

Ford Motor Co. employees at the Dearborn truck plant wear face masks and face shields while working within 6 feet of each other.

Ford Motor Co. said production at four plants will be affected by the semiconductor shortage next week. And the Dearborn automaker's profit-rich F-150 production at Dearborn Truck Plant is canceled for two weeks because of the shortage, a move likely to thin even more precious inventory on dealer lots. 

Automakers have been battling a global semiconductor shortage since the start of this year. Production at various plants in North America and abroad has been halted or reduced because of the shortage of semiconductors, which are found throughout a vehicle from the seats and steering wheels to infotainment and engine-management systems. 

The goal — especially for Detroit automakers — has been to protect the profit-rich full-size truck and SUV plants. But that hasn't always been possible as the chip shortage moves into its second quarter this year. 

"It just goes to show you how hard it is, and the issue is visibility and transparency in the supply chain, how hard it is to predict and move things around," said Dan Hearsch, managing director in AlixPartners, a global consulting firm.

"All the OEMs are working very hard to try and keep the pickup trucks, large SUVs, the high-value, high-revenue, high-profit models running. And when you see that they can't do that, that is your indication of just how difficult this is."

AlixPartners estimates that through last week, the industry has lost 1.4 million vehicles of production globally because of the chip shortage. For the year, the firm expects up to 2.5 million vehicles could be lost if the current climate continues. AlixPartners' analysis predicts the auto industry will lose $61 billion this year because of the shortage.

There should be some recovery from the shortage by the third quarter, Hearsch said, with lost units of production made up by 2022. 

New shutdowns for GM

GM's Wentzville Assembly in Missouri will resume production of midsize trucks April 12 after being down since March 29. But the automaker has to shut down Spring Hill Assembly in Tennessee, where the GMC Acadia, Cadillac XT5 and XT6 are built, for two weeks starting April 12. 

The Detroit automaker also is halting production of the Chevrolet Blazer at its Ramos Assembly plant in Mexico the week of April 19. The Lansing Delta Township plant, where the Buick Enclave and Chevrolet Traverse are built, is also scheduled to go down that same week. 

Lastly, GM moved to extend downtime though the week of April 26 at its Lansing Grand River Assembly plant, where the Cadillac CT4, Cadillac CT5 and Chevrolet Camaro are built. That plant has been down since March 15. 

GM originally planned to reopen by mid-April its plants in Kansas, where the Cadillac XT4 SUV and Chevrolet Malibu are built, and in Ontario, where the Chevrolet Equinox is built. But those plants will now be down through May 10 — three months since they closed the week of Feb. 8.

No summer shutdown at Ford 

At Ford, the Dearborn F-150 plant is down through next week, among other production hits announced last week

The Dearborn automaker said Thursday it will shut down the week of April 12 the following plants "due to parts shortfalls tied to the semiconductor shortage:"

  • Chicago Assembly Plant, where the Ford Explorer, Police Interceptor Utility and Lincoln Aviator are built, 
  • Flat Rock Assembly Plant, where the Ford Mustang and Shelby GT350 & 350R are built,
  • Kansas City Assembly Plant on just the Transit side of production

Ford's Ohio Assembly Plant, where vans and medium-duty and Super Duty trucks are built, will operate on reduced shifts. 

To make up for the lost production, Ford will operate several plants during the traditional summer shutdown weeks in late June and early July. Those plants are: Dearborn Truck Plant, Michigan Assembly Plant, Flat Rock Assembly Plant, Kentucky Truck Plant, Ohio Assembly Plant, Chicago Assembly Plant and Kansas City Assembly Plant. 

Asking for more auto chip supply

Stellantis NV halted production at five North America plants in late March until early-to-mid April. 

Toyota Motor Co. on Thursday said in a statement to The Detroit News: “Due to COVID and recent severe weather related events, Toyota has been informed that a supply shortage will continue to affect production at our Kentucky, West Virginia, Mississippi, Texas and Mexico plants."

Honda Motor Co. is running normal production at its North American plants. 

The Alliance for Automotive Innovation, a trade group that lobbies on behalf of the automakers, says the projected loss from the semiconductor shortage could be 1.3 million vehicles. 

The Alliance included that figure in a letter sent to the U.S. Department of Commerce April 5 asking for funds included in a proposed bill for increasing semiconductor production to be allocated for supply that supports the auto industry.

Alliance President John Bozzella wrote in the letter: "Given the importance of chips to current auto production and future automotive innovation, it would be regrettable if none of the funding under the CHIPS for America Act, once appropriated, was used to increase the resiliency of automotive supply chains through the construction of new facilities that produce or have the ability to produce auto grade chips."

Twitter: @bykaleahall