General Motors Co (NYSE: GM) will halt production of its profitable full-size pickup trucks next week at most U.S. and Mexican facilities due to the ongoing global shortage of semiconductor chips, CNBC reported Wednesday, citing the company.
What Happened: The Detroit-based automaker will cut production for manufacturing plants in Michigan, Indiana and Mexico that make the Chevrolet Silverado and GMC Sierra pickups.
The production halt will include a temporary production pause next week at GM’s Fort Wayne Assembly plant in Indiana and at its assembly plant in Silao, Mexico.
Production will be lowered to one shift from three shifts at the company’s Flint Assembly plant in Michigan where heavy-duty trucks are built. Full production at the plants is expected to resume the week of August 2.
The shortage is expected to make a $110 billion dent in automotive industry revenue in 2021, as per consulting firm AlixPartners, reported CNBC.
Why It Matters: GM said last month that the ongoing semiconductor shortage and rising commodity inflation could bring in a $2 billion to $3 billion headwind in the second half of the year.
The automaker expects the low inventory environment to continue well into 2022 if the demand stays strong.
Automakers across the globe including Ford Motor Co (NYSE: F), Volkswagen AG (OTC: VWAGY) and Tesla Inc (NASDAQ: TSLA) have been rushing to make their most profitable models first to tide over a lingering chip shortage that started last year.
Price Action: GM shares closed 1.6% higher at $57.05 on Wednesday.
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