General Motors has confirmed its GM Lansing Delta Township plant will take an additional week of downtime, with production at the plant now set to return on Monday, August 23rd. The plant produces the Chevy Traverse and Buick Enclave mid-size crossovers.
The GM Lansing Delta Township plant went dark on July 19th amid a shortage of semiconductor chips. The plant was originally set to come back online on August 16th, however with the parts shortages persisting, the plant will now remain offline for at least another seven days.
GM is prioritizing its full-size truck and SUV models as it weathers the chip shortage, which represent its most popular and profitable products. This, in turn, has resulted in numerous production stoppages at its passenger car and crossover plants, including lengthy delays at the Fairfax Assembly plant in Kansas and Lansing Grand River Assembly plant in Michigan. The Fairfax site builds the Chevy Malibu and Cadillac XT4, while Lansing Grand River builds the Cadillac CT4 and Cadillac CT5, as well as the Chevy Camaro.
According to AutoForecast Solutions, an estimated 5.8 million vehicles globally have not been built due to the chip shortage so far. That number will also rise in the coming months, with the shortage expected to last until at least early 2022.
GM is hoping to avoid future chip shortages by negotiating stronger supply contracts with chip makers, the automaker’s CFO, Paul Jacobson, said earlier this year.
“Whether we work with foundries to give longer-term commitments or we look to partnering with folks, we’re looking at all aspects of the supply chain to really ensure that something of this magnitude as it relates to chips doesn’t happen again,” Jacobson said.
The automaker said previously the chip shortage will trim around $1.5 billion to $2 billion from its 2021 operating profit. GM reported a net income of $2.8 billion on revenues of $34.2 billion in Q2 2021.
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Comments
This stems from getting too many of your ‘eggs’ from foreign baskets. One big, happy, global family are we.
Who’s watching the chicken coup, not Mary, she’s got Joe manipulation, have a truck on order, ordered May 4th, 2021, no one has a clue, no one cares to have a clue, hide behind the chip. Well I have a chip, 2018 bought a new truck, got lost coming out of Flint Mich, truck was lost for 8 weeks, no one had a clue then, no one had a clue during the bankruptcy. The only one with a clue is the guy that has the chips, don’t think your customers will stay in bed forever.
I would like to know why gm don’t make some of those chips in USA .Can you explain because I don’t understand when Gm made fintalators when haspatols needed them
Making computer chips requires an entirely different set of expertise than creating a mechanical ventilator machine or a mechanical car. And only companies that have been doing it for a long time have that expertise. Look at Intel and its hard time reducing the size of it’s chips last year and how AMD surpassed them in successful miniaturization of the computer ship before Intel. That is why AMD has been so successful over the past year.
Don’t cancel your contracts with the Semiconductor manufacturers the next time we have a global pandemic? God knows you have plenty of room at the Warren Tech Center to store them. Imagine how much GM would be making now if they had not cancelled their contracts with the semiconductor manufacturers in 2020?
Dear Rick Kellogg, I can’t find any news articles indicating that GM cancelled contracts with semiconductor manufacturers in 2020. Can you please give me the exact title of one of those articles so I can look it up and read it.
Thanks.
Dear Rick Kellogg, I searched again using 3 different search engines and could not find one shred of evidence indicating that GM cancelled any contracts with any semiconductor (chip) manufacturers whatsoever. Where is your evidence?
Detroit Free Press article on how this started. One of many I have read.
Why is there a chip shortage?
So in March 2020, the global pandemic prompted automakers, suppliers and car dealerships to close down. The economy went into a recession.
The automakers, who have experienced previous recessions, quickly canceled orders for parts with computer chips, thinking auto sales would nosedive, said Michelle Krebs, executive analyst for Autotrader.
Sales of new cars did plummet initially, but quickly rebounded with pent-up demand and 0% financing offers. Also, dealers figured out how to sell vehicles online, offering home pickup and delivery.
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So when the factories restarted, the stronger-than-expected demand for new vehicles outpaced production and has yet to catch up.
“Automakers and suppliers that use chips contacted their chipmakers and put back their orders,” Krebs said. “By then, chip capacity was consumed by other businesses — phones, computers, video games — as people worked and schooled at home.”
Global chip production is monopolized by a few global, Asia-Pacific suppliers, said Joe McCabe, CEO of AutoForecast Solutions LLC.
“Everyone’s lights went off at the same time. This means that there was no ability to build inventory of products and solutions when businesses were able to turn their lights back on,” McCabe said. “This created a significant bottleneck in all manufacturing processes.”
The chip deficit was further complicated by a fire at plant owned by chipmaker Renesas Electronics in Japan. The damage was extensive and the plant is not yet up to full production, but they are hoping it will reach full production in June, Krebs said.