GM truck production takes first hit as chip crunch grinds on
Detroit — General Motors Co. will halt regular production of its profit-rich trucks for the first time next week because of the continuing semiconductor shortage affecting the industry, the automaker confirmed Wednesday.
GM canceled production of light-duty Chevrolet Silverado and GMC Sierra pickups at its Fort Wayne Assembly plant in Indiana and at its assembly plant in Silao, Mexico, during the week of July 26. The Flint Assembly plant where heavy-duty Silverado and Sierra trucks are built will go down to one shift that same week. Full production is expected to resume the week of Aug. 2.
The Detroit automaker has been able to mostly protect its full-size truck production this year as crosstown rivals Ford Motor Co. and Stellantis NV have both had to halt production at various points.
The semiconductor shortage has rocked the industry since the start of the year, sending inventory levels to record lows as consumer demand remains high. Experts expect billions in revenue and millions of vehicles will be lost as a result.
The impact has been visible in the sales and earnings figures at automakers.
Ford's truck supply, for example, was hit so hard in the second quarter by the chip shortage, its F-Series franchise sales fell behind the Silverado and Stellantis' Ram after a long-time domination of the Detroit Three truck wars.
Ford has repeatedly had to shut down production of its best-selling F-150 while GM's truck lines kept rolling — until now.
"It was just a matter of time before they had to shut down" the pickup plants, said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions. "They've shut down so many other plants, making sure that Silverados and Sierras hit dealership lots but it was about to bite them at some time."
Semiconductors or chips are produced primarily in Asia, which has in recent weeks battled upticks in coronavirus cases.
"These most recent scheduling adjustments are being driven by temporary parts shortages caused by semiconductor supply constraints from international markets experiencing COVID-19-related restrictions," GM spokesman David Barnas said in a statement Wednesday. "We expect it to be a near-term issue."
Barnas said the plants will use the downtime "to complete unfinished vehicles at the impacted assembly plants and ship those units to dealers to help meet the strong customer demand for our products.”
Last Thursday, GM said it would halt production at Lansing Delta Township Assembly, home of the Chevrolet Traverse and Buick Enclave SUVs, this week through the week of July 26.
Also in those weeks, GM has halted production of the Cadillac XT5 and XT6 and GMC Acadia in Spring Hill, Tennessee. Production was also paused on the Chevy Equinox and GMC Terrain compact SUVs at San Luis Potosi Assembly and the Equinox and Chevy Blazer SUVs at Ramos Assembly, both in Mexico.
Lastly, GM extended production downtime of the Equinox at CAMI Assembly in Ontario through Aug. 16.
Fiorani has expected to see some type of recovery from chip shortages by the fourth quarter, "but signs like this make you rethink that and think it's gonna take longer," he said after GM's truck production announcement.