Home / Business / General Motors is not running more of its automobile plants due to a shortage of chips.

General Motors is not running more of its automobile plants due to a shortage of chips.

Ford said it will not operate the Chicago assembly line next week. Kansas City, Mo; And Flat Rock, Michigan, and will cut production in Avon Lake, Ohio.

The shutdown will affect an estimated 10,000 workers, said GM spokesman David Barnas. Ford did not say how many workers will be affected.

The hourly GM workers represented by the union “will receive approximately 75 percent of compensation from a combination of unemployment and complementary benefits,” Barnas said by email.

“We continue to work closely with our sourcing base to find solutions for our suppliers’ semiconductor requirements and to minimize the impact on GM,” Barnas said. Go into these factories as much as possible “

“All full-time workers in service for more than a year have been paid about 75 percent of their gross pay over the past several weeks,” Ford spokeswoman Kelly Feller said by email.

The chip shortage associated with the pandemic affects almost all major automakers, leading to cuts in global production affecting Toyota, Volkswagen, Honda and others. Chinese electric vehicle maker Nio also temporarily halted production in March.

The global auto industry will produce 1.5 million to 5 million fewer cars this year than originally planned due to supply constraints, according to consulting firm AlixPartners.

Production cuts “have the potential for rebound” in the economy, because when automakers are idling their factories, “they don’t just have a lot to do.” But only had to deal with their own workers But there are also many input suppliers that depend on their business, ”economist Chad Bown said. With the Peterson Institute for International Economics in Washington.

Semiconductors, also known as computer chips, are the brains behind many electronic devices, including cars, which use dozens of semiconductors to control air bags, windows and other parts of the world. The surge exceeded global supply, putting manufacturers of all kinds in dire.

The White House relies on major chipmakers and host countries, including Taiwan, to boost output. It also calls for $ 50 billion in federal funding to incentivize more domestic chip production, even if those funds are approved by Congress, far beyond mitigating the shortage in the country. Present

The root of the shortage was in the first weeks of the outbreak, when automobile factories around the world suddenly shut down amid home orders. Automobile sales fell nearly in half between February and April last year, driving companies and parts suppliers to significantly discount their semiconductor purchases.

At the same time, the demand for computers and other electronic devices is on the rise as more and more consumers start working from home. That forced electronics manufacturers to increase their chip purchases. As demand for cars bounced back, auto companies found semiconductor factories too busy with other orders to meet their needs.

Chip factories cost billions of dollars to build or expand, so there’s no easy way to quickly increase production.

The complexity of the automated supply chain is increasing the problem. Ambrose Conroy, founder of Seraph Consulting, said GM bought auto parts from about 250 suppliers that would buy chips from 11 semiconductor makers, Ambrose Conroy, founder of consultancy Seraph Consulting. To many automakers on the chip shortage problem.

“We are going to talk about semiconductor issues for the rest of 2021. I don’t think we can get out until 2022,” he said.

“GM has asked all suppliers to order chips until the end of 2022. They have sent a message that now is the time to prepare for 2022, they are trying to control damage in 2021,” Conroy said.

In little good news, GM said Thursday it was restarting production at its Wentzville, Mo. facility, which was idle in March.

The cold that hit Texas in February worsened supply by knocking two Austin chip factories offline on March 11, owners of those facilities NXP Semiconductors. Said to have returned to continue. The disruption cost the plant about a month, NXP said.

Last week, Ford said the plant in Dearborn, Michigan; Louisville; And Oakville, Ontario; It will stop over several weeks in April and the company will cancel changes at several factories in June.

To try to compensate for some of the lost production, Ford intends to operate several U.S. plants during traditional summer closures in late June and early July, Ford spokeswoman Felker said.

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