General Motors is planning to make significant changes to its supply chain in the wake of the semiconductor chip shortage, which has already cut 800,000 vehicles from the automaker’s planned production so far this year.
GM CEO Mary Barra revealed the automaker’s plan to overhaul its supply chain in a live-streamed media event held Friday called Gaining Altitude, in which she appeared alongside Delta CEO Ed Bastian. Barra said the automaker did not previously buy chips directly from chipmakers, but it is now forging stronger relationships with the likes of Intel and NVIDIA to prevent a situation like the one it is currently facing from happening again.
Barra’s comments echo those of GM Chief Financial Officer Paul Jacobson, who said during a conference in June that the company is hoping to forge stronger relationships with chipmakers going forward.
“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.
While the COVID-19 pandemic is largely to blame for the chip shortage, demand for silicon wafers will remain high in the coming years as automakers continue to release technologically advanced vehicles with more onboard tech like large display screens and active safety systems.
Despite the setbacks, Barra believes GM can weather the storm and come out the other side with stronger supplier relationships and better access to chips – though it will take a while to fully subside.
“It’s a solvable problem, but it’s going to be here a little longer,” Barra said, as quoted by Bloomberg.
GM has been forced to shut down several plants this year due to chip shortages, some of which have remained offline since February. The automaker has been able to mitigate the effects of the shortage by prioritizing chips for its most popular vehicles, which include full-size trucks like the Chevy Silverado and GMC Sierra and full-size SUVs like the Chevy Tahoe and GMC Yukon.
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Comments
NVIDIA doesn’t make chips, they contract TSMC, exactly like GM’s primary supplier today, NXP.
Yup, probably a good idea to have a direct relationship with the world’s largest chip foundry TSMC.
AND really NXP does not make them either. Even they sold their plants they once owned some years ago that are STILL in existence. There are a handfull of producers left. Look for little no names companies that have been producing and supplying many of the others the chips that DONT have fabs and are not branded like INTEL inside….like the news in Malta NY a few months ago with good ole Chucky. They could not make enough in 2020 and now 2021.
How about supply issues with the 3 liter diesel and the same with the 6 cylinder gas. Maybe should have done this a long time ago. Buy , build in our continent!!
Seems like a no brainer. Must’ve been Mary’s idea?
was considering an Acadia…..there are hardly any available within a 100 mile radius. Pitiful.
Is that chip in China too?
I doubt it. I bet most of any chips are from Tawain, Japan and USA. One fab in Japan had a fire and it takes months to bring new tooling online again let alone to qualify a line or set of tools. More fabs that make a design for an i.e. NXP or AMD or…will get in to the car market if not already. But it takes time especially if they don’t already do it.
They key to supply and demand problems? Build your own chips! When demand is low, drop down a shift.
GM went down a long and painful road getting out of vertical integration. I don’t think it will be in a big rush to make that mistake again.
That sounds really Great!! But all these shut downs is really getting HARD TO MAINTAIN UR BILLS EVER MONTH, and make sure your family eats every night!! With No Idea when we will return to work and NO HELP FROM THD UNION (tvs supply solutions) It’s a hard load to carry!!!
They still do not get it. It is just not the chips but also other parts and they need to put plants back in the US so this kind of things do not happen again. I was ready to buy a 2021 Tahoe when the Covid hit. They lost this sale and it does not look like they will have this resolved anytime some.
Quit cutting features out of customers trucks without asking if they are ok with it, when someone buys a built truck they expect a built truck not what you want to provide. And your reimbursement for these cuts is a joke the amount of money it will cost to replace such items isn’t close in cost to your allowance. Fix your issues.
“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.
Shouldn’t they have done this in the first place?
An what about 2021 Escalade production? No one seems to have any idea when they will be built! I have been waiting since December of 2020 for the car!!!!
I put in an order for the 2022 diesel Escalade, at the time of the order I was told December 2021 or March 2022. We got a call saying they have stop the production of the diesel Escalade indefinitely because of the chip shortage. Don’t know when I will get my Escalade 🤦🏿♀️.
From Roger Smith to Mary Barra, quite the set of bookends!
They should have their own plants in the U.S.. Stop outsourcing everything.
Here’s another less popular idea…Stop adding so many tech features to vehicles. I don’t need an iPad for my main control panel, I don’t need to access apps from my car, I don’t need my car to park or drive itself, etc…safety features aside, some of the new stuff is plain ridiculous.
Quite frankly, I’m turned off by my main controls being via a giant touchscreen. I find them to be more distracting and forcing my eyes off the road longer than the previous dials did.
Gm produced their own chips until 2017 when they closed the plant in the US due to cost.now look where they are
Oh no. My 1981 GMC needs a new Johnson rod and they back ordered ohhhhhhhh nooooo.
Get back to building great V8’s. drop cylinders for me = no purchase
It’s clear that basement Joe will not help out as he is only concerned with migrants overrunning our USA!
My 66 Malibu doesn’t have any chips except the bag in my lunch box
My 66 Malibu doesn’t have any chips except the bag in my lunchbox
i have had a truck on order for 2-3 months. already made first payment. it is complete and built but held for spray in bed liner- and NO ONE can give me an ETA of when it will be completed.. Factory will not release it till complete- Dealership cant get anywhere with GM either