GM To Idle Most North American Truck Production Over Chip Shortage

At one time, General Motors was piling up its truck inventory at dealers.

General Motors (GM) will again idle down some of its vehicle production due to the semiconductor chip shortage that is plaguing automakers across the globe.

The automaker will halt the North American production of most of its full-size pickup trucks for the next week, starting on Monday, CNN reported.

GM has previously said that it expects the plant shutdowns due to the chip shortage to cut its operating costs by $1.5 to $2 billion this year.

According to CNN, GM will stop production at its Fort Wayne, Indiana, assembly plant on July 26 for a week. The plant builds the Chevy Silverado 1500 and GMC Sierra 1500 trucks models. It will also reduce production from three shifts to one shift in Flint, Michigan, and halt production in Silao, Mexico, the news outlet said.

GM’s Flint plant builds the heavy-duty version of the Chevy Silverado and GMC Sierra pickup trucks, while the Silao plant builds the Silverado 1500 Cheyenne for the Mexican market and the Sierra 1500.

The plants are expected to resume full production the week of Aug. 2, CNBC reported.

"The global semiconductor shortage remains complex and very fluid, but GM's global purchasing and supply chain, engineering and manufacturing teams continue to find creative solutions and make strides working with the supply base to minimize the impact to our highest-demand and capacity-constrained vehicles, including full-size trucks and SUVs for our customers,” GM told CNBC in an emailed statement.

GM’s pickup trucks and SUVs make up the most profitable part of its vehicle lineup.

The company has worked to keep the best-selling vehicles in production despite the chip supply shortage by diverting the part away from less popular models, CNN said. But more global shutdowns restrictions are coming due to the COVID Delta variant, which is compounding the issue.

“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 told CNN. “We expect it to be a near-term issue.”

GM is not alone in temporarily closing plants because of the chip supply chain issues. Toyota closed three plants in Thailand and a plant in Japan due to supply chain disruptions caused by the COVID pandemic, Reuters reported. Honda also shut a plant in Japan, according to local news reports.

Ford has also said that the chip shortage will cut $2.5 billion from its earnings in 2021.

Shares of GM were trading at $55.96 as of 2:18 p.m. EDT on Thursday, up $1.09, or 1.92%.