US GM extends production cuts as semiconductor shortage continues

HOUSTON (ICIS)–US automaker General Motors Co announced on Wednesday that production cuts at three North American plants will be extended amid the continued global shortage of semiconductors.

The company said in a release that it continues to use existing supply of semiconductors to build and ship its most popular and in-demand products, including full-size trucks and SUVs.

GM said it has not taken downtime or reduced shifts at any of its truck plants due to the shortage.

Production will continue to be scaled back in the US at Fairfax, Kansas; the CAMI plant in Ontario, Canada; and in Mexico at San Luis Potosi.

Downtime at San Luis Potosi is scheduled through the end of March, and at Fairfax and CAMI until at least mid-April.

Additionally, GM said its Gravatai plant in Brazil will take downtime in April and May.

The company said it continues to work closely with its supply base to find solutions and to mitigate impacts.

“Our intent is to make up as much production lost at these plants as possible,” the company said in the release. “We contemplated this downtime when we discussed our outlook for 2021 last month.”

US automaker Ford Motor Co said previously that it was also scaling back production because of the shortage.

The recent winter storm in Texas contributed to the shortage as Samsung shut down its Austin plant after Austin Energy asked all large-scale manufacturers to shut down to put residential customers back online.

The auto industry is still recovering from reduced production in 2020 related to the coronavirus pandemic.

Reductions in auto production have a direct impact on the chemical industry.

The automotive industry is a major global consumer of petrochemicals which contributes more than a third of the raw material costs of an average vehicle, and production disruptions could severely weigh on demand.

According to ICIS, chemicals with a significant percentage of their global demand tied to the automotive industry include nylon resins, styrene-butadiene-rubber (SBR), polypropylene (PP), acrylonitrile-butadiene-styrene (ABS), polymethyl methacrylate (PMMA) and polycarbonate (PC).

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