Chip shortage caused General Motors and Ford to cut production

Chip shortage caused General Motors and Ford to cut production

Multiple US plants are idling production due to semiconductor shortage

The global chip shortage caused by the COVID-19 pandemic led some tech companies to reduce their production or even temporarily shutdown.

General Motors, the largest US automaker, will cancel multiple truck production shifts at two of its auto plants located in Indiana and Michigan because of the current semiconductor shortage. Moreover, the company is looking to halt production at one of its plants during the two traditional shutdown weeks in the summer to boost production.

The Detroit-based company is not the first one to temporarily halt shifts and production. Ford announced that it would cancel overtime shift in Chicago, Kansas City, and Ohio. The company announced that the chip shortage could lower its earnings by $1 billion to $2.5 billion in 2021. More information about the shortage’s impact on the company’s figures will be revealed on April 28, when GM will release its Q1 report.

According to data from AlixPartners, the chip shortage will cut $60.6 billion in revenue from the global automotive industry in 2021.

At the moment of writing, General Motors stock price is up 0.12%, while Ford is trading 0.4% higher.

Sources: finance.yahoo.com, abcnews.go.com, reuters.com

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