General Motors has announced it will pause production of the Chevy Equinox crossover at the CAMI Assembly plant in Ontario for two months due to a semi conductor shortage.
A GM spokesperson confirmed to AutomotiveNews Canada today that the assembly plant will be closed until at least the end of June while GM addresses the chip shortage.
“CAMI employees were notified this morning they will remain down through at least the week of June 28,” GM Canada spokeswoman Jennifer Wright told the publication over email. “We continue to work closely with our supply base to mitigate the short-term impact and leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs for our customers.”
GM has maintained a strategy of saving its limited inventory of semi-conductor chips for its popular and profitable vehicles in recent months, which include the Chevy Silverado and GMC Sierra pickups and full-size SUVs like the Chevy Tahoe and GMC Yukon. While the Equinox is among GM’s most popular models, it is also produced at the Ramos Arizpe plant in Mexico in addition to CAMI, so it will maintain some level of production while the Canadian plant remains idle.
The global semiconductor chip shortage is expected to worsen in the coming months as demand continues to outpace production. In its Q1 earnings report, Ford cut its second-quarter production outlook by half and said the chip shortage could last until early 2022. Ford has also been forced to shut down a number of production plants in recent months due to the chip shortage and, like GM, has made efforts to safeguard the production of its full-size pickup trucks.
Goldman Sachs analysts said last week that the complexity of manufacturing semi-conductor chips and the time it takes to set up a new chip manufacturing facility means there no quick fix for the shortage.
“Because of the proprietary technologies, specialized machinery, and economics of scale needed to produce any given type of computer chip or component — and because many of the mature facilities are already operating near full capacity — the imbalance is likely to persist into the fall and possibly into 2022,” the investment bank said in a research note.
President Biden met with GM CEO Mary Barra, Ford CEO Jim Farley and the CEOs of several major tech firms earlier this month to discuss the chip shortage and what a potential homegrown solution might look like. At the time, White House press secretary Jen Psaki said the meeting wasn’t held to come up with a solution right away, but was rather a “part of our ongoing engagement and discussion about how to best address this issue.”
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Comments
Curious to know how much money the car companies had hoped to save by cutting back on semiconductor orders compared to their actual losses for lost production in what turned out to be a red hot market.
What makes you think they are cutting back on orders?
The problem is the supply of semiconductors, not demand.
They’ll probably take every chip they can get.
It was both. Carmakers cancelled orders early in COVID so PCs and personal electronics filled their space since they correctly figured work and school from home would increase demand. Then capacity got hit, so now nobody has enough.
It takes several months from start to finish to produce a chip, and then the chip fabs keep a queue of several more months of orders to absorb problems and cancellations.
“President Biden met with GM CEO Mary Barra, Ford CEO Mark Fields and the CEOs of several major tech firms earlier this month to discuss the chip shortage”
umm, FYI, Mark Fields isn’t CEO of Ford anymore. I’m guessing you meant Jim Farley
To all that think a switch to game systems is the reason there is a shortage of chips have been misinformed by the mainstream media. There were two major fires one in China and one in japan at the largest auto chip suppliers that gutted the plants it will take about two years to get back to normal, if you do not believe me just google China semi conductor fire and read for yourself. You will never see it in the main stream media, because it ruins the Trump trade war story. This story is far from over, it is now affecting tech in the military, maybe we should make things in America again, sorry for the rant.
Uh, not quite. The Japanese fire at Renesas was after the chip shortage was already in full swing (and just added to it). The fire in China impacted supply, but that’s not enough to explain the overall issue.
The issue stems from simple supply and demand. As the auto industry paused in early COVID times, due to JIT supply, they stopped taking chips. At the same time, global gadget demand went up dramatically as people were at home, needed digital interaction tools, etc. Look at the record sales of phones and computers in the period. Chip makers go where the money is given the huge capital cost of their plants. They can’t afford to sit idle. That then ties up their supply for long terms (given contract length).
This isn’t a mainstream media lies / fake news / pro- or anti-Trump thing. It’s called economics, and it’s quite simple. No conspiracies. Just basic math.
There were actually two major fires in Japan. The first one was October 2020 at AKM which makes high-end audio converters, control chips for crystal oscillators, and chipsets for millimeter-wave radar. All these components, especially the latter two were found in vehicle electronics. A lot of the clock chips were sold on to other vendors who stuck a crystal on them, so many end customers were unaware they were affected until supply dried up.
AKM’s recovery plan involved shifting as much production as they could to an existing contractor: Renesas.
Yet another reason I’m glad to own 2000s cars.
Less chips
Less complexity
Less BS.
The Honda and Toyota dealerships in my area have no lack of vehicles on their car lots; I see cars being unloaded there every week. If those manufacturers were able to manage the shortage of critical components, why couldn’t gm?
I read on this site every day about gm’s factories in China and Mexico, yet gm continues to shut down it’s factories on this continent.
What’s going on at gm?
Mary Barra is lost… If you look at gm stock right before the last bailout it was in a very similar hyperinflated pattern, then shareholders lost everything. Upper management at gm still got to keep all their money. My gm shares are long gone, I have no confidence in Mary.
Local Toyota factory hasn’t missed a beat because of chips they were smart and kept their chip orders going while GM did not. They just recently had a hiccup because a supplier had a Covod outbreak.
After the trouble and refusal to back up their O ring and piston issue that should have been recalled and fixed without issue. I hope they lose more than a few months. I have a blown engine AFTER I had to out if pocket pay to replace them last year July 2020 and STILL lost oil and STILL suffered a blown engine in March 2021. Will the replace…sure after I fork out ANOTHER $4500 (half the cost of a long block replace. All because it is after the 120,000 miles. Well excuse me for having a work car AND this piece of S… I hope they go out of Business. I hate and will never own another gm product even if given to me.
Change over to 22s now and stock up on chips.
I was just driving my 1951 Studebaker Champion this afternoon. Seemed to be running just fine without any chips.
GM, has no business having production plants anywhere other than the USA anyway. I shutter to think what a car would be like without a chip. How did they operate before? Geesh
I think you mean “shudder”. Shutter is what they do to plants in the US where the union makes them uncompetitive for anything but large trucks and SUVs.
My 55 Chevy took me all over the United States never had to replace a computer chip. We didn’t want cars that drove themselves we enjoy driving. Now the highways are so overcrowded with computerized junk. The fighter pilots flying supersonic jets are even getting replaced. All this b******* needs to stop and this country needs to get back to the basics. Transmissions with computers ain’t that some s*** if Junior can’t drive a standard shift he can sit his ass at home. I could rent all day long but apparently I’m an old fart who will be replaced by semiconductor or computer chip.
What’s your plan to solve this? Kill off half the population or something?
We’re not going back to the 50s.