American multinational automakers General Motors Co. and Ford Motor Company have announced to cut their vehicle production volumes as a result of the worldwide shortage of a semiconductor chip.
General Motors reported that it will be halting production for two weeks at its Spring Hill plant that assembles popular SUVs. It will also be cutting one week’s production of Chevrolet Blazer at its Michigan-based Lansing Delta Township factory and Ramos plant in Mexico.
The company’s Lansing Grand River Assembly will be shut down through the last week of April, while its Fairfax Assembly and CAMI Assembly (Canada) plants are anticipated to extend shutdowns through the second week of May.
GM said that this year’s profits could fall by USD 2 billion due to the production cuts. Interestingly, the company has not reduced shifts or taken any downtime for its more profitable full-size SUV or full-size truck plants on account of chip shortages.
The second-largest U.S automaker Ford Motor Co. said that it will be canceling production for the next week at its Flat Rock Assembly Plant, Chicago Assembly Plant, and in some parts of its Kansas City Assembly Plant. The company’s Ohio Assembly Plant is set to work on a reduced schedule for the time being.
Several American automakers had recently requested federal aid and warned that a global shortage of semiconductor chips could lead to production capacity loss of 1.28 million vehicles this year, disrupting production for the next six months.
U.S. President Joe Biden intends to put in USD 50 billion to augment the country’s semiconductor production in the long run. However, a solution for the immediate crisis at hand is still to be discussed.
White House spokeswoman Jen Psaki reportedly stated that the issue is being considered and worked upon at the highest level across government
The White House is planning a summit on the chip shortage issue. CEOs of both General Motors (Mary Barra) as well as Ford Motor Company (Jim Farley) are expected to attend the event.
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