(March 25, 2021) General Motors extended production cuts in North America on Wednesday due to a worldwide semiconductor chip shortage that has impacted the auto sector. GM's action followed a similar announcement Tuesday by Honda Motor Co., which said it will extend production suspensions at some North American plants into the week of March 29 due to the chip shortage and other supply chain issues.

Also this week, Ford  said it would cut output this week of the Transit van at its Kansas City, Mo., assembly plant due to the shortage. Production of the flagship F-150 pickup at the plant is not affected. Ford and Stellantis have said they would partially assemble and park their large pickups to finish later when chip supplies allow.

GM said its Wentzville, Mo., assembly plant would be idled during the weeks beginning March 29 and April 5. It will extend down time at its plant in Lansing, Mich., which has been idled since March 15, by two weeks. The action was factored into GM's prior forecast that it could shave up to $2 billion off this year's profit, spokesman David Barnas said. GM did not disclose how much volume would be lost by the move, but said it intended to make up as much lost production as possible later in the year.

Vehicles affected by the GM production cuts include the midsize pickup trucks Chevrolet Colorado and GMC Canyon in Missouri, and the Cadillac CT4 and CT5 and Chevy Camaro cars in Michigan.

The chip shortage came as North American auto plants were shut for two months during the COVID-19 pandemic last year and chip orders were canceled, and as demand surged from the consumer electronics industry as people worked from home and played video games. That's now left carmakers competing for chips.

Semiconductors are used extensively in cars, including to monitor engine performance, manage steering or automatic windows, and in sensors used in parking and entertainment systems.

Stellantis, the world's fourth-largest automaker, said it will build and hold for final assembly its Ram 1500 Classic trucks at its Warren, Mich., and Saltillo, Mexico, assembly plants. When chips become available, the vehicles will be completed and shipped to dealers.

Exacerbating the shortage is a recent fire at a Renesas Electronics Corp. chip plant in Japan. Barnas said GM was assessing the impact of the blaze. Ford is doing the same, while Stellantis and Mazda said their operations have not yet been affected.

Sources: Reuters, news reports