GM is extending plant shutdowns at three plants due to chip shortages

General Motors is extending temporary shutdowns of three assembly plants until mid-March due to a global shortage of semiconductor chips.

The affected factories are located in Kansas; Ontario, Canada; and San Luis Potosí, Mexico. They produce the Chevrolet Malibu sedan and Buick Encore, Cadillac XT4, GMC Terrain and Chevy Equinox and Trax crossovers.

The shutdowns, which were initially scheduled to last this week, will be reassessed in mid-March. They are intended to ensure that the company has enough semiconductor chips to produce its more profitable pickups and SUVs.

“Semiconductor supply remains a problem facing the entire industry,” GM said in a statement. “GM’s plan is to use every semiconductor available to build and ship our most popular and in-demand products, including full-size trucks and SUVs and Corvettes for our customers.”

Cox Automotive says GM’s stocks of the Malibu and crossovers are higher than what the industry typically considers “healthy,” meaning the automaker can afford to cut production at its factories.

Semiconductors are extremely important components of new vehicles for areas ranging from infotainment systems to more traditional components such as power steering. They are also used in consumer electronics.

Automakers and parts suppliers began warning of a shortage of semiconductors late last year after demand for vehicles rose more than expected after a two-month shutdown of production facilities last spring due to the coronavirus pandemic.

Ford Motor was forced to cancel production of its highly profitable F-150 pickup trucks this week due to the shortage of chips. The company said it couldn’t prioritize the production of the pickups because they use unique chips compared to other models.

Ford said last week that the deficit could cut its revenues by $ 1 billion to $ 2.5 billion this year.