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Monday, March 1, 2021

GM to idle 3 plants until March for deepening microchip shortage

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Kalea Hall, The Detroit News, (TNS)

DETROIT — General Motors Co. said the three plants it shut down this week because of a deepening microchip shortage hammering the global auto industry will remain closed through at least mid-March.

GM has halted production at the Fairfax, Kansas, plant where the Cadillac XT4 and the Chevrolet Malibu are built, the CAMI plant in Ontario where the Chevrolet Equinox is built, and the San Luis Potosi plant in Mexico where the Equinox, the Chevrolet Trax and the GMC Terrain are built.

GM said Tuesday it is “extending downtime at those plants and will reassess in mid-March.” The automaker didn’t previously give a return-to-work date for the plants affected when it said last week production would be down the week of Feb. 8.

“Our intent is to make up as much production lost at these plants as possible,” GM said in a statement, one day before the Detroit automaker is set to report fourth-quarter and full-year 2020 financial results.

The semiconductor shortage affecting the entire industry is expected to last through at least the end of the second quarter, analysts say, potentially impacting operating results, white-collar bonuses and profit-sharing payouts to union-represented employees come this time next year.

For now, no other North American GM plants have been shut down, but the automaker now intends to build vehicles without certain modules and then complete them later. GM already started to do this at its Wentzville, Missouri, plant where mid-size trucks and full-size vans are built and at the Ramos Arizpe assembly plant in Mexico where the Equinox and Trax are built.

The automaker is trying to protect its profit-rich large SUV and pickup truck plants from being affected since demand for those products is high. And GM isn’t alone in battling the chip shortage.

Ford Motor Co. is operating its Dearborn Truck Plant and Kansas City Assembly where F-150s are built on reduced shifts this week because of the global shortage. Last week, the Dearborn automaker reported that it could see between a $1 billion and $2.5 billion hit to its annual earnings as a result of chip-related production losses this year.

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