More Production Cuts At Ford, GM As Chip Shortages Continue To Disrupt Vehicle Build Schedules

Ford (F) and General Motors (GM) have extended their temporary production shutdowns due to the global semiconductor chip shortage for the near term, announcing more cuts on Thursday.

According to Reuters, GM’s Ramos plant in Mexico will close down for another two weeks. The plant produces the Chevrolet Blazer SUV and has been shut down since Aug. 23, the news outlet said.

GM will resume operations at its Lansing Grand River Assembly plant in Michigan, which has been shut down since May, Reuters said. The plant produces the Chevy Camaro and the Cadillac CT4 and CT5.

Ford will also shut down more plants next week, including its Flat Rock Assembly Plant in Michigan, where the Mustang is produced, as well as its Kansas City Assembly Plant in Missouri, where the Transit van is built, according to the news outlet.

However, Ford will continue to build its popular F-150 trucks, operating one shift compared to three shifts at its Kentucky Truck Plant next week, Reuters said.

The semiconductor chip shortage has plagued automakers worldwide as the component was diverted to tech devices during the pandemic due to the high demand for computers, phones, and tablets.

The auto industry, among other sectors, has suffered from chip disruptions, forcing production cuts and vehicle delays. In some instances, vehicles were being produced without the chips, while in other cases, orders were no longer being taken for this model year.

Auto executives have speculated that the chip shortage will go on for several years.

Ford Europe Chairman of the Management Board Gunnar Herrmann told CNBC last month that he estimated that the chip disruption could extend until 2024, adding that it was difficult to know exactly when it could end.

In a report from AlixPartners, released on Sept. 23, the global consulting firm estimated that the cost to the worldwide auto industry could be a staggering $210 billion in revenue losses in 2021, up from its May estimate of $110 billion.

As of Friday premarket hours, shares of Ford were trading at $14.26, up 10 cents or 0.71%, while shares of GM were trading at $52.95, up 24 cents or 0.46% at the same time.