Chip Shortage Hits GM, Leads to Production Cuts

The Detroit auto maker had previously signaled the chip shortfall could impact its operations, telling suppliers late last year that they should stockpile semiconductors. But as of January, production hadn’t been affected.

GM now plans to take down three North American factories for a week, starting Monday. They include its assembly plant in Kansas City, Kansas, which makes the Chevy Malibu sedan and Cadillac XT4 crossover, as well as its factories in Mexico and Canada that build two compact SUVs. It also plans to operate its factory in Korea that makes the Chevy Trax and Buick Encore at half capacity, beginning next week.

GM said it would provide weekly updates on its plans, as well as more details when it reports earnings on Feb. 10.

The auto industry is now one of the world’s biggest purchasers of computer chips, and demand is only increasing as car companies load their latest models with big-screen displays and more sophisticated tech.

This latest move by GM illustrates that the chip shortage that emerged in Chinese factories late last year continues to disrupt output for manufacturers at a time when many are still recovering from Covid-19-related plant shutdowns in 2020.

Volkswagen AG , Ford Motor Co. and other major car companies have also trimmed factory shifts in recent weeks because of limited chip supplies. Industry executives fear that the problem will only get worse before it gets better.

This week, the chip shortage temporarily halted U.S. production at several Ford SUV plants. At its factory in Chicago, the auto maker is running only one eight-hour shift, instead of three shifts, which will curb output of the Ford Explorer SUV, one of its top-selling models, and the Lincoln Aviator SUV.

Ford this week also closed a plant in Louisville, Ky., where it makes the Escape and Lincoln Corsair SUVs. The semiconductor shortage also contributed to Ford’s decision to idle for this week its Oakville factory in Ontario, Canada, where it makes the Ford Edge and Lincoln Nautilus SUVs.

Nissan Motor Co. said it canceled two days of production last month at its plant in Canton, Miss., and will take another day of downtime in February due to limited chip supplies. The Japanese auto maker builds several models at the plant, including the Titan pickup and Altima sedan.

—Mike Colias contributed to this article.

Write to Christina Rogers at [email protected]

The Detroit auto maker had previously signaled the chip shortfall could impact its operations, telling suppliers late last year that they should stockpile semiconductors. But as of January, production hadn’t been affected.

GM now plans to take down three North American factories for a week, starting Monday. They include its assembly plant in Kansas City, Kansas, which makes the Chevy Malibu sedan and Cadillac XT4 crossover, as well as its factories in Mexico and Canada that build two compact SUVs. It also plans to operate its factory in Korea that makes the Chevy Trax and Buick Encore at half capacity, beginning next week.

GM said it would provide weekly updates on its plans, as well as more details when it reports earnings on Feb. 10.

The auto industry is now one of the world’s biggest purchasers of computer chips, and demand is only increasing as car companies load their latest models with big-screen displays and more sophisticated tech.

This latest move by GM illustrates that the chip shortage that emerged in Chinese factories late last year continues to disrupt output for manufacturers at a time when many are still recovering from Covid-19-related plant shutdowns in 2020.

Volkswagen AG , Ford Motor Co. and other major car companies have also trimmed factory shifts in recent weeks because of limited chip supplies. Industry executives fear that the problem will only get worse before it gets better.

This week, the chip shortage temporarily halted U.S. production at several Ford SUV plants. At its factory in Chicago, the auto maker is running only one eight-hour shift, instead of three shifts, which will curb output of the Ford Explorer SUV, one of its top-selling models, and the Lincoln Aviator SUV.

Ford this week also closed a plant in Louisville, Ky., where it makes the Escape and Lincoln Corsair SUVs. The semiconductor shortage also contributed to Ford’s decision to idle for this week its Oakville factory in Ontario, Canada, where it makes the Ford Edge and Lincoln Nautilus SUVs.

Nissan Motor Co. said it canceled two days of production last month at its plant in Canton, Miss., and will take another day of downtime in February due to limited chip supplies. The Japanese auto maker builds several models at the plant, including the Titan pickup and Altima sedan.

—Mike Colias contributed to this article.

Write to Christina Rogers at [email protected]