General Motors will idle its profitable midsize pickup plant in Missouri for two weeks and extend the shutdown at Lansing Grand River Assembly into April due to the ongoing global shortage of semiconductor chips used in various car parts.
In a memo to the 3,500 workers at Wentzville Assembly in Missouri, where GM builds its Chevrolet Colorado and GMC Canyon midsize pickups, the automaker said the plant will shutter from March 29 through April 5.
GM also said it is moving forward its launch construction downtime at that plant by about two weeks. It will now be shut down from May 24 to July 19, instead of the shutdown starting sometime in June.
Pulling ahead the downtime will give GM more time to build product to meet customer demand throughout the remainder of the year, GM wrote in an employee memo obtained by the Detroit Free Press. It said portions of the factory will remain active to support limited projects. GM also builds its full-size vans at Wentzville, but that production is not impacted by the chip shortage, the automaker said.
GM spokesman David Barnas confirmed the two-week shutdown at Wentzville.
But he added that GM is able to bring its mid-size SUV plant in Mexico back on production starting April 5 because GM’s supply team secured the chip parts for the vehicles built there.
“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs for our customers,” Barnas said. “We continue to work closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impact on GM.”
Japan plant fire
The global chip shortage crisis has crippled production across many automakers.
At Wentzville, two hourly workers, who asked to not be named for fear of losing their jobs for talking to the media, say more than 20,000 midsize pickups are in a holding area — built, but awaiting parts with chips to be completed and shipped.
Barnas declined to comment on any specific figures involving vehicles awaiting parts at the plant.
On March 19, a production line where semiconductor chip wafers are made at Renesas Electronics Corp. in Japan caught fire. A source familiar with GM said this latest shutdown at Wentzville and the extended shutdown at other plants is not connected to that fire.
“I can’t say it will or won’t have an affect on the supply chain, but it’s too early to say what if any the impact may be,” said the source, who asked to not be named because he is not authorized to share that information with the media.
GM has not taken downtime or reduced shifts at any of its full-size pickup or full-size SUV plants due to the shortage, Barnas said. GM makes its heavy-duty pickups at Flint Assembly and its light-duty pickups at Fort Wayne Assembly in Indiana and Silao Assembly in Mexico.
GM intends to make up as much production lost at these plants as possible, Barnas said, adding that the production disruptions are not expected to change the company’s projected earnings for the year.
“We contemplated these type of actions when we discussed our outlook for 2021 last month,” Barnas said.
GM’s impacted plants
Demand for semiconductor chips is up in part because of the coronavirus pandemic and increased demand for laptop computers and other personal electronics that use the chips. Cars also use them in a variety of parts and infotainment systems. In fact, one car part could use 500 to 1,500 chips depending on the complexity of the part, analysts said.
GM has shut down production at the following plants:
- Since Feb. 8: Fairfax Assembly and Stamping Plant in Kansas City, Kansas: About 2,000 hourly workers build the Chevrolet Malibu sedan and Cadillac XT4 SUV.
- Since Feb. 8: CAMI, Ingersoll, Ontario, Canada: About 1,500 hourly workers build the Chevrolet Equinox SUV.
- Since Feb. 8: San Luis Potosí, Mexico: Builds Chevrolet Equinox and Trax and GMC Terrain SUVs. It comes back up to two-shifts of production the first week of April.
- Since March 15: Lansing Grand River: About 1,400 workers build the Cadillac CT4, Cadillac CT5 and Chevrolet Camaro. It remains down until mid-April.
GM said production at Lansing Grand River, Fairfax and CAMI will be shuttered until mid-April. GM had initially intended to resume production at Lansing Grand River by the end of March.
Additionally, GM’s Gravatai plant in Brazil will take downtime in April and May. The Gravatai factory, in Rio Grande do Sul, Brazil, builds the Chevrolet Onix, which is a top-selling car in South America.
In South Korea, GM’s Bupyeong 2 plant has been operating at half-capacity since Feb. 8. GM builds the Chevrolet Trax, Chevrolet Malibu and Buick Encore vehicles there.
UAW members anticipated parts shortage developments like this and have protections in the union contract, including supplemental pay and unemployment, that pays almost 80% of salary and continued benefits. However, the UAW is working with employers to minimize the impact on auto manufacturing production as much as possible, it said.
More:GM extends production shutdown into April due to semiconductor chip shortage
Pickups protected?
In a bold statement to Wall Street on Feb. 10, GM CEO Mary Barra said industry-wide shortage of semiconductor chips will not affect production of GM’s highly profitable pickups and SUVs this year.
“Rest assured the semiconductor shortage won’t slow our growth plan. We anticipate a strong year ahead,” Barra told reporters.
Barra said GM would try to protect pickups and full-size SUVs from any impact from the chip shortage. But the shortage could cost GM up to $2 billion in lost earnings this year. Barra said GM expected chip supplies to return to normal in the second half of the year.
Barra said GM is working to protect its production of pickups and SUVs.
“We’re doing everything possible. We won’t lose any production throughout the year where it relates to pickups and SUVs,” Barra said. “We’re going to be able to meet our production outlook.”
One potential solution, Barra said at the time, if GM does face a chip shortage in modules used in its pickups and SUVs, is to build the vehicles, then when the modules become available, assemble them and ship them.
On Monday, GM started building certain 2021 light-duty full-size pickups without a fuel management module. That will go until the end of the model year in late summer, all because of the chip shortage.
Rivals down, too
Across town, Ford Motor Co. has had to either shut down or cancel shifts in January and February at a half-dozen of its North American plants, including its F-150 pickup plants because of parts shortages.
On Monday, Ford said the chip shortage has forced it to cut the number of shifts at the Kentucky Truck Plant in Louisville and shut down the Ohio Assembly Plant in Avon Lake this week. Ohio Assembly will be down completely and Kentucky Truck will be working two of three shifts because of a parts shortage.
Last week, Ford announced that it would be building F-150 pickups without all the parts needed because of the parts shortage.
Stellantis, formerly Fiat Chrysler Automobiles, shuttered plants in Mexico and Canada, building the Jeep, Chrysler and Dodge vehicles, through the end of January. But most of its North American facilities ran normally in February, except Windsor Assembly, which was down for three weeks.
The shortage is preventing one version of the popular Ram 1500 pickup from being shipped to dealers. The truck, known as the Ram 1500 Classic, is built at Stellantis’ Warren Truck Assembly and at a plant in Mexico.
Stellantis said Monday that it is holding unfinished trucks at the plants until parts become available.
More:As chip shortage cripples auto production, Biden steps in
More:Arctic blast, chip shortage mean UAW members may not get summer vacation
Contact Jamie L. LaReau at 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.