General Motors Is Stockpiling Unfinished Vehicles Due To Microchip Shortage34
As the ongoing global semiconductor shortage continues to drag down the auto industry, General Motors has adopted a “build-shy” strategy that keeps the production line moving, while parking unfinished units as they await the chips needed for completion.
According to a recent report from Detroit Free Press, General Motors is currently stockpiling tens of thousands of unfinished vehicles as the critical semiconductor chips trickle in, including pickups, SUVs, and vans. The vehicles are currently being stored at the automaker’s facilities in Mexico, Texas, Missouri, Indiana, and Illinois.
“We’ve been doing [build-shy] for a few months,” UAW Local 2209 Shop Chairman Rick LeTourneau at Fort Wayne Assembly told Detroit Free Press. “We have about 15,000 trucks parked now.”
It’s estimated that a similar number of vehicles are parked at GM’s facility in Silao, Mexico, while a further 30,000 vehicles are parked at Wentzville Assembly in Missouri.
General Motors has so far declined to provide exact figures on how many vehicles are currently parked and waiting for chips.
“The number changes because, as chips become available, we’re working that [to install the missing parts],” said GM CEO Mary Barra during a first-quarter earnings media call this week. “What I will tell you is that we do have some vehicles that are in that status. When we have the semiconductor and can insert the module, we’ll do that and then the vehicle will go through a very thorough and rigorous quality testing.”
The “build-shy” strategy is intended to to keep production online and expedite General Motors’ high-profit models, including its full-size SUVs and trucks, while making the best of a bad situation as chip supplies run tight.
The semi-conductor chip shortage has affected the entirety of the auto industry, with automakers scrambling to keep production rolling in order to meet rising customer demand. However, according to the latest estimates, the chip shortage has cut General Motors’ North American production figures by roughly 80,000 units thus far, with several facilities incurring downtime as GM prioritizes its high-profit models.
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This is a sad state of the current reality for just about all OEM’s.
According to the haters, it’s only a GM problem.
Mary doesn’t know what she’s doing and is failing at making the company profitable and is very short sighted. Yesterday’s earnings report was all fake news.
No its the incompetent American automakers that are suffering the most.
Ironically it’s just an extension of low IQ America.
VW is suffering, Toyota is suffering, Ford is suffering, Chinese makers are suffering too, so europe and Asia are right there with us…
actually went to a Honda dealer yesterday and told me to expect a shortage of Honda because of the chip shortage. Figured in two months start to be back to normal..
you are one of those obviously.
The smart and highly intelligent Japanese. Aka Honda & Toyota know how to secure a stable supply of critical vehicle components.
didn’t prevent them from shutting down factories as well.
Toyota only had a few months of supply and they are hurting now too. They started to stock pile after the Nuclear plant melt down caused delays for them.
Going forward all manufactures will probably work on on having extra stock of computer components. The US maybe better off in about 2 years since 2 new plants are coming online for computer chips.
Computer manufactures are also hurting. Highend product is constrained for everyone.
Its not just computer components. Materials for plastics were impacted after the major freeze in Texas.
lol. That is not what the Mazda sales reps are saying. They are stating low inventory due to chip shortages is what keeps them from having to offer incentives on most regions.
Just-in-Time (JIT) delivery of components is great…until it isn’t. It will take a good 12-18 months before this whole mess is sorted out.
Thank you! JIT was savior of efficient production, until it wasn’t!
My q is,why aren’t we making our own? Too much reliance on foreign suppliers,can never be good.
It is reliance on any outside supplies. Tires are next and even Coopers and Goodyear’s made in America can be found in short supply.
The virus and changes in buying habits, plant shut downs and shipping delays are all in play.
It is much more than just chips that are on long back orders. In the performance market and auto parts market all are seeing long back orders.
This whole deal has been a chain reaction.
Add in the fire at one of the largest chip makers and the increase in sales of computers due to work at home there were so many things that could not have been planned for.
This is when the old days were better. No computer parts at all in a car. Why not turn back a few years and go back to the easy way to build cars?
It’s more than a few years. Over 30. We’ve had fuel injection, electronic ignition, and monitored emissions equipment since the 90’s. It’s not all over complicated unnecessary electronics either. It’s stuff as simple as the trailer brake controller modules on the trucks and SUVs (in fact I believe that’s one of the main computers they’re waiting for).
Bill Gates needs them for his vaccine.
Had a nice chat with the GM of our local Chevy-GMC-Buick-Cad dealer the other day. Their on lot stock is at 217 vehicles, including used. Normal is 5-600. They actually have more used Sierras available (10) than new (9). Have 1 Yukon available (new, no used). 120 miles away in St. Louis sit dozens of vehicles for them waiting on chips. Most already sold. Worst part is while GM is diverting the available chips to manufacturing to keep auto workers employed, they use the partially complete units against the dealers ability to order additional units. You would think they are trying to put their distributers and maintenance people out of business.
I have been trying to get the no BS answer to this question. I have a 2022 HD ordered. It shows built the week of 8-9-2021 and is in a MP status or missing parts. When semiconductors arrive are they going to keep the line running and allowing GM to ship new built vehicles or are the new vehicles being built short and the chips getting installed in the sold off lot units?
GM is diverting chips from some of the shutdown factories to use for the stockpiled incomplete inventory. They are also using downtime at those plants to then complete the stockpiled inventory and then get those vehicles shipped to dealers. GM is building upwards of 1000 “incomplete” vehicles daily. There have been reports that car carriers are coming and going from the storage lots at the rate of one every 20-30 minutes. So what I understand is that the assembly line is building vehicles with missing chips, those vehicles go to the storage lot, then as the chips arrive they are installed in the stockpiled vehicles, and those vehicles are then shipped to the dealers.
I had ordered a 21 sierra, one of the last built with all chips – my understanding from local dealership is sold, special order units currently get priority. If just buying a unit a dealer had already ordered, unsure.
That gives me some hope.
there is no excuse for just in time inventory for chips as they can be stored without taking up much space.
it’s not a matter of storage as much as it is inventory cost and chip obsolescence.
do they buy the chips programed or do the car companies program them ?? blank chips do not take much space.
This is exactly what happens when a major manufacturer relies on the Chinese simply for a lower price. Your supplier controls you, you do not control the supplier. I deal with two “gm” dealers and their lots are literally empty of vehicles. The Toyota, Kia and Nissan lots are full of vehicles. All roads lead to China.
At Pratt and Whitney we use the Just In Time process to avoid the insane inventory tax. Far from perfect, the tax avoidance has to be done. I’m sure the auto manufacturers are up against that same tax.