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General Motors Planning To Make Significant Changes To Its Supply Chain

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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Sam McEachern: Sam loves to write and has a passion for auto racing, karting and performance driving of all types.

View Comments (22)

    • 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!!

    • 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.

    • 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?

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