GM plans to restart 4 North American plants after chip shutdown
Detroit — General Motors Co. shares rose nearly 3% Thursday after the automaker confirmed plans to restart production over the next month at four North American plants, signaling progress in the global semiconductor shortage weighing on the auto industry.
The return of production at the plants, some happening sooner than expected, comes after months of GM and other automakers battling a shortage that is expected to cost the industry $110 billion globally and potential production of 3.9 million units for the year, according to the latest estimates from global consulting firm AlixPartners.
Experts expect automakers to have the most difficulty navigating the chip shortage in the second quarter. Relief from the shortage should come by the end of the third quarter into the fourth.
"When this whole thing blew up in the first quarter, everybody said it would take four to six months to get a factory capable of making these chips ready, so that takes us to the third quarter, which is where everybody's targeting," said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. "We're just looking for confirmation that a proper supply of chips has been located for everybody, or for anybody for that matter."
In its Thursday update, GM said next week it will restart its San Luis Potosi Assembly plant in Mexico for production of the Chevrolet Equinox and GMC Terrain after a two-week shutdown. It also plans to resume production next week of the Chevrolet Blazer and Equinox at Ramos Assembly in Mexico, which has been down since May 3.
Additionally, after being shut down since Feb. 8, CAMI Assembly in Ontario, where the Chevrolet Equinox is built, will resume production earlier than expected on June 14 and run through July 2 until a scheduled two-week summer shutdown period.
Production of the Chevrolet Camaro at the Lansing Grand River plant also will begin earlier than expected June 21. That plant has been down since May 10. However, Cadillac CT4 and CT5 production there will remain down through the week of June 28, which GM previously announced. The plant will start limited 2022 model year Cadillac Black Wing production in early June.
GM still plans to keep Fairfax Assembly in Kansas, which has been down since Feb. 8, idle through at least the week of July 5. That plant builds the Chevrolet Malibu and Cadillac XT4.
Outside of North America, GM said Bupyeong 1 Assembly in Korea will resume full production May 31. The plant, which makes the Chevrolet Trailblazer and Buick Encore GX that are exported to the U.S, had been operating at 50% capacity since April 26.
Dan Hearsch, a managing director in AlixPartners' automotive and industrial practice, said he expects other automakers to follow GM's action.
"I think that this is an indication that the hard work of the past few months is starting to hit and you'll start to see other automakers announce openings of their plants over the next few months," he said. However, he added the companies haven't been and probably won't be specific about production rates with plant restarts.
Outside of chip constraints, GM is also dealing with an unspecified temporary supply issue at its Bowling Green, Kentucky, plant where the Chevrolet Corvette is built. The plant was down the week of May 24 and will also take the week of May 31 off, GM confirmed Thursday. Production is slated to restart there June 7.