General Motors Extends Shutdowns at Three Factories Amid Semiconductor Shortage


General Motors (NYSE:GM) said today that it will extend shutdowns at three of its North American factories until at least mid-March, amid an ongoing global shortage of semiconductor chips. 

GM is one of several global automakers that have had to reduce production because of a shortage of computer chips. Chipmakers have scrambled to fill orders for automotive-grade silicon while coping with a surge in demand from makers of higher-end personal computers and peripherals. 

Demand for home computers, including high-end gaming computers, has risen sharply amid the pandemic.  

The affected GM factories are all assembly plants that build finished vehicles:

  • GM Fairfax Assembly, in Fairfax, Kansas, builds the Chevrolet Malibu sedan and the Cadillac XT4 crossover SUV.
  • GM’s CAMI facility, in Ingersoll, Ontario, builds the Chevrolet Equinox crossover.
  • GM’s San Luis Potosí Assembly plant, in San Luis Potosí, Mexico, builds the Equinox, the smaller Chevrolet Trax crossover, and the GMC Terrain SUV. 
A red Chevrolet Equinox, a compact crossover SUV.

Three of GM’s North American factories will remain idled for at least four more weeks, including two plants that make the popular Chevrolet Equinox crossover. Image source: General Motors.

GM initially announced the temporary closures on Feb. 4, along with a production slowdown at a fourth factory in South Korea. At that time, it said that it would provide weekly updates; it now expects the three North American factories to remain idled for at least four more weeks.

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GM did not provide an update on the South Korean plant. 

In a statement, GM reiterated that it is prioritizing the manufacture of products that are in high demand, including its full-size pickup trucks, its big truck-based SUVs, and the Corvette sports car. In addition to being in high demand, the prioritized vehicles are some of GM’s most profitable product lines. 

GM will report its fourth-quarter and full-year 2020 earnings and provide guidance for 2021 before the market opens on Wednesday, Feb. 10. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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