GM, Prolonged Shutdown Due to Semiconductor Shortage

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The shutdown of General Motors (GM), the largest automobile manufacturer in the United States, is expected to be prolonged due to the global semiconductor shortage.

According to the Associated Press (AP) on the 8th (local time), GM has extended the suspension of operations at its plants in Kansas, USA, and Ontario, Canada, until the 10th of next month. Initially, these plants aimed to resume production on the 10th of this month after the shutdown in February, but the prolonged semiconductor chip shortage has made it inevitable to extend the plant shutdown.

Additionally, GM announced plans to either halt operations or reduce production at three plants in Tennessee and Michigan, which had not been affected by the previous semiconductor chip shortage. These plants produce popular models such as Chevrolet SUVs and Cadillac vehicles.

Until now, GM had been coping with the semiconductor shortage by reallocating chips used in less popular models to the production of popular models, but even this has become unavoidable.

GM stated, "We will continue production of popular models by utilizing all the semiconductors currently secured."

As the semiconductor chip shortage prolongs, the impact on the automotive industry, including GM, is expected to be significant. GM anticipates a pre-tax profit reduction of up to $2 billion this year due to the semiconductor shortage. IHS Markit estimates that North American automobile production decreased by 100,000 units from January to March this year due to the semiconductor chip shortage.

The AP reported, "The automotive industry is expected to experience a revenue decline of $60 billion in the first half of this year alone."

This content was produced with the assistance of AI translation services.