GM sees 'better flow' of chips, runs overtime at some plants

Kalea Hall
The Detroit News

General Motors Co. has no plants down this week because of the ongoing global semiconductor shortage, and the Detroit automaker has scheduled overtime at several plants in recent weeks. 

"We are currently seeing a better flow of semiconductors in our supply chain, our North American assembly plants are now back to running regular production, and volumes are increasing in the fourth quarter," GM spokesman Dan Flores said in a statement, noting several plants, including those making full-size trucks, are running weekend overtime shifts. 

"We have made some weekend overtime scheduling adjustments at several of our plants in November and December," he said. "This includes Arlington, Ft. Wayne, Wentzville, Lansing Delta Township, Lansing Grand River and Silao, which have been working select weekend overtime shifts."

Unrelated to the chip shortage, GM's Wentzville, Missouri, mid-size truck plant is down for several weeks for "construction updates that are needed in various departments in order to support production of our next-generation mid-size trucks," Flores said. Orion Assembly, the Chevrolet Bolt EV and EUV plant, is down through Jan. 28 as GM works through a recall of those vehicles and focuses on providing battery supply to the affected vehicles over making new product. 

Automakers have been battling the semiconductor shortage since the start of the year and the effects are supposed to last into next year, but experts at Fitch Ratings Inc. do expect to see some gradual improvement in semiconductor supply in 2022.

"Semiconductor availability should modestly increase on a sequential basis through 2022 but supply chains remain vulnerable to potential event risk due to the trajectory of the pandemic," the firm said Monday.

The shortage has cost valuable production time and sales. It also has led to record-high prices with the supply not meeting high demand. In October, average new-vehicle prices surpassed $46,000 for the first time, according to Kelley Blue Book. 

Fitch expects "the supply/demand mismatch that led to very strong vehicle net pricing and mix in 2021 will continue" in the first half of next year, but the increasing production and rebuilding of inventory levels in the second half of 2022 could lead automakers' "operating margins to come under pressure."

The shortage is estimated by AlixPartners LLP will cost the industry $210 billion in lost revenues this year.

Additionally, the global consulting firm expects the industry to lose production of 7.7 million vehicles this year.

Twitter: @bykaleahall