GM extends production cuts due to chip shortage

The global chip shortage is further slamming production at GM.

General Motors said Wednesday it would extend downtime at plants in Kansas and Ontario until at least mid-April and in San Luis Potosi in Mexico through the end of March. It’s adding a fourth one to that list: a plant in Sao Paulo, Brazil that will be idled in April and May.

The automaker didn’t disclose the impact on volumes or say which supplier or parts were affected by the chip shortage. But its CFO said chip supplies should return to normal rates by the second half of the year. A GM spokesman said the company had already contemplated this downtime when it issued its 2021 outlook, which warned the chip shortage could chop up to $2 billion from this year’s earnings.

The chip shortage has hit automakers globally, although some like Toyota and Hyundai avoided deeper cuts by stockpiling chips ahead of the shortage. Straining supplies: surging consumer demand for laptops and gaming consoles as people stay at home and car purchases that topped expectations.

The shortage propelled President Joe Biden to say last week he’ll seek $37 billion in funding to turbo charge chip production in the U.S.

"We’re reaching out to our allies, semiconductor companies and others in the supply chain to ramp up production to help us resolve the bottlenecks we face now. We need help to stop, we need to stop playing catch up after the supply chain crisis hit.”

That chain was dealt another blow by the severe winter storm that slammed Texas last month. It forced several chip plants to shut down, and industry officials say customers would face knock-off effects in several months.