GM to Temporarily Shut Three Plants as Chip Shortage Pinches

David Welch and Skylar Woodhouse, Bloomberg News

A vehicle exits the General Motors Co. (GM) assembly plant in San Luis Potosi, Mexico, on Monday, Jan. 23, 2017. One out of every eight workers in San Luis is employed by the auto sector, all of it made possible by the decades-old North American Free Trade Agreement that's propelled millions of Mexicans into the middle class and which Trump is now threatening to shred. , Bloomberg

(Bloomberg) -- General Motors Co. warned that a global semiconductor shortage will reduce production this year as the carmaker plans downtime at three plants, becoming the latest in a string of automotive companies impacted by limited chip availability.

The company said Wednesday that three North American plants, including one in Kansas and others in Mexico and Canada, would shut down the week of Feb. 8. It will also operate a factory in South Korea at half-capacity that week, it said.

GM has worked to maintain output at its four full-size pickup and sport-utility vehicle plants -- which account for the bulk of its profits. But the situation “remains very fluid,” it said in a statement.

Ford Motor Co., Toyota Motor Corp., Volkswagen AG and other carmakers announced production cuts last month due to a semiconductor shortage. Chipmakers are short on supply because they allocated more of their production to consumer-electronics producers after global automakers shuttered plants last year as a result of the Covid-19 pandemic.

Read more: A Year of Poor Planning Led to Carmakers’ Massive Chip Shortage

Lack of Visibility

Aptiv Plc, a top automotive-software and parts supplier, declined to give financial guidance for the first half of the year when it reported its latest earnings on Wednesday, citing a lack of visibility into automakers’ production schedules due to the chip shortage.

“Our industry is now facing increased pressure from a global shortage in semiconductor chips, impacting virtually all of our suppliers and customers around the world,” Kevin Clark, the company’s chief executive officer, said on a call with analysts. He added that Aptiv expects the supply of chips to increase in the second half of the year as more are allocated to automakers.

GM also said it has idled its Corvette sports car plant in Bowling Green, Kentucky, this week due to a parts shortage unrelated to semiconductors, said a spokesman. The closure is due to transmission parts.

The chip-related shutdowns will hurt GM in key segments like small crossover SUVs. The plant in Fairfax, Kansas, makes the Cadillac XT4 crossover, and the factories losing output in Ingersoll, Ontario, and San Luis Potosi, Mexico, build the Chevrolet Equinox small SUV, among other models.

(Updates with Aptiv CEO comments from fifth paragraph.)