A General Motors executive recently indicated that the worst of the global shortage in microchips could be over.
According to a recent report from CNBC, General Motors CFO Paul Jacobson said that the shortage appeared to be improving. “Over the last couple of weeks as we talked about this being a volatile situation, we’ve actually seen the situation get better for us,” Jacobson said during a Wolfe Research conference on Wednesday. “At this point, I would say that we’re highly confident about being able to hit our guidance that we put out to the Street.”
Earlier in February, General Motors said that it expected $10 billion to $11 billion in adjusted pretax profits for the 2021 calendar year. The prediction included the impact of the global microchip shortage, with a $1.5 billion to $2.5 billion hit to free cash flow.
“We feel confident that we’re working through this issue and that we’ll be able to return to normal as soon as the back half of this year,” Jacobson said, adding that the automaker does not expect the microchip shortage to be an issue going forward.
So far, the global microchip shortage has affected the entirety of the automotive industry, cutting into production as recovery from the COVID-19 pandemic continues. General Motors expressed concern over the shortage in January, and was later forced to cut production at several of its facilities, including Fairfax (Kansas), Ingersoll (Ontario), San Luis Potosi (Mexico), and Bupyeoung (South Korea).
According to global automotive forecasting company AutoForecast Solutions, the chip shortage is estimated to have resulted in losses of 56,600 GM vehicles from North American production facilities, with the most heavily impacted facility being GM’s San Luis Potosi plant in Mexico.
The microchip shortage has also affected availability of optional equipment offered for General Motors’ latest full-size SUV models, some of the most popular (and profitable) vehicles that the automaker offers.