General Motors will resume full-size pickup assembly next week, leaving its crossovers will have to continue enduring production hang-ups related to the semiconductor shortage. American manufacturers have been absolutely creamed by supply shortages this year and a lack of chips really hurt pickup volumes. We’ve seen a lot of creative solutions, including automakers putting unfinished vehicles on the lot in hopes that they can install the missing hardware later.
But GM’s latest solution involves prioritizing Michigan’s Flint Assembly, Indiana’s Fort Wayne Assembly, Silao Assembly in Mexico — all of which were previously idled or operating on reduced schedules. Unfortunately, that means giving other North American facilities more downtime and, sadly, plenty of it.
According to Automotive News, this includes Kansas City’s Fairfax Assembly — which has been idled since February — and five other factories located in North America. The facility was supposed to return to normal at the start of this month, which was later revised for the end of August. However, the newest plan leaves Cadillac XT4 production offline until September 20th, with Chevrolet Malibu assembly now being a giant question mark.
Lansing Grand River Assembly, responsible for the Cadillac CT4 and CT5, has been down since May and just got a two-week extension on its current production leave. Assembly isn’t likely to resume until the very end of August.
San Luis Potosi Assembly has enjoyed more production time than most North American facilities this year. But it’s getting another three weeks of downtime before resuming production of the Chevy Equinox and GMC Terrain. Those models will be back on the assembly line on August 23rd.
That just leaves GM’s Lansing Delta Township, Spring Hill, and Ramos Arizpe facilities — all of which will be getting just one more week off. But we’ve learned not to assume anything in 2021, especially since this is just one of dozens of scheduling changes that had to be revised by automakers. If chip supplies don’t stabilize, we anticipate the manufacturer prioritizing Lansing — so it can get more Chevrolet Traverses and Buick Enclaves on the lot Ramos Arizpe — which builds the Chevy Blazer and Equinox — also has a good chance of getting preferential treatment. Though the whole gang is supposed to be fully operational by August 2nd.
General Motors is just one automaker contending with this industrywide disaster, however. This week saw Mercedes-Benz and BMW also cutting production, citing supply chain problems. Meanwhile, Nissan CEO Makoto Uchida was expressing his pensiveness about the ongoing semiconductor shortage to the media despite his company turning a profit for the first time in a while.
“Knowing the current situation … we cannot be optimistic,” Uchida told CNBC on Wednesday. “I think this is day-by-day still.”
[Image: General Motors]
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Can somebody explain why the shortage is taking so long to solve?
(In 5-8 sentences). Some explanations go on for 6 pages.
How much do these chips cost? If a 10$ part is preventing the build of a $60,000 pickup. Pay $250 for the dam chips. You ll get priority fast. Jeez.
Renesas factory went of fire. “The company accounts for 30% of the global market for microcontroller units used in cars, and two-thirds of the chips produced at the facility are for the auto industry.”
1. I’m not sure what the production throughput is, but it seems the same chips, or types of chips, were used by multiple mfgs.
2. Therefore only so much supply which can be had and how it is allocated may not be as simple as going to the highest bidder.
3. There are also general reports I’ve read where companies are ordering more product than they need so they have some slack capacity because the future is very murky.
4. So you also may have an element where too much is being ordered and that contributes to bottlenecks.
5. However there is a very real possibility what started as a legitimate problem is now all artificial.
6. Whether its the producers holding back/rerouting, issues with import/export, or something stateside we’re a year/close to a year in and its still apparently an issue.
7. If this continues into the Fall, I think it confirms the latter theory.
Unlike your cell phone the computer in the car cannot reboot while in ABS braking event or while powering the airbags or engine. It needs to operate in -50° to 150°F for many decades. The lead time for through tests is a out a half of a year.
What?
The automakers got out of the line and by the time they got back from the bathroom the line had grown significantly and they had no choice but to go to the back of the line.
There you go 1 sentence.
The 2 sentence version includes; It is expensive and time consuming to set up new plants.
With everyone working from home all the chips went into PCs and related office technologies.
And it turns out it takes a LONG time to make chips: https://www.bloomberg.com/graphics/2021-chip-production-why-hard-to-make-semiconductors/
So you can’t get just pay more to move the line forward.
I think it was you who mentioned that car makers are bitchy to deal with, like they are A list celebs, and suppliers could just as easily sell chips to the nice cell phone company who doesn’t act all extra and pays on time….
Let me guess which vehicles sustain the highest profit margins in GM’s lineup.
Yes, or profit x volume. Can’t blame GM, though – no point in building duds right now.
My local Toyota dealer has an empty lot with only 51 new cars on it – 16 Tacomas, 6 Camrys, 6 Highlanders, and 6 RAV4 Hybrids.
Notably absent: RAV4 and Prius.
6*3 + 16 = 18 + 16 = 34 != 51
Does anybody care about a couple Corollas, or a lone Avalon?
I care.
Yet you read stories about how Toyota was so much smarter than every other manufacturer, and better managed their supply chain to avoid microchip shortages that are affecting everyone else. Same old “domestics are backwards idiots and imports are brilliant” BS that the media likes to spin.
America is Evil. Don’t you know that? Watch Olympic games.
“Unfortunately, that means giving other North American facilities more downtime”
This is the time to shine for the Trax, Encore, Encore GX, Trailblazer, and Envision!
If you see what people are throwing around to get their hands on a full size truck right now, it makes perfect sense.
This really is the only segment that the Big 3 makes profits on and keeps the lights on. People are never going to pay big money for domestic CUVs and sedans.
This.
And, in addition, Pickup Buyers tend to be brand loyal, unless they have been thoroughly screwed by a lemon. GM does NOT want to risk a bunch of lifetime Chevy guys to become Ford guys, due solely to lack of available product on the lot.
I know this isn’t really practical, but if I were GM, I would divert every chip possible to Silverado production, including away from Sierra and maybe even the BOF SUVs. Maybe make a temporary deal to allow GMC dealers to sell Silverados. With Ford suffering through F-Series production shortages, Silverado would have a pretty decent shot at taking the overall sales title, and then we wouldn’t have to listen to any more ads telling us how the F-Series has been the best selling vehicle for past 50 years.
Chevys on the lot would soil the name. GMC loyalists know where to find Silverados and they would never own one in a million years. I know it’s silly, but GM’s own research shows over and over, if GMC was killed off, the loyalists would switch to Ram or Ford, loony as it sounds.
That’s true.
Chevy diehards would pick Ford or Dodge over GMC. Ironically, GM diehards aren’t as plentiful and some would go to Chevy.
A pickup site that Denver and I used to frequent had a story on it.
What if China refuse to sell US chips during war? How military industrial complex and CIA solves this problem when they are not busy with woke agenda?
You are fear mongering.
Why don’t you research before you speak!
https://www.semiconductors.org › …PDF
Web results
Made in America: The Facts about Semiconductor Manufacturing
Very little comes from China.. 4%
Provided that we are willing to go to war to defend Taiwan, I agree it’s not a long term problem.
If China attacks Perl Harbor. Otherwise no.
The Programming Republic of Perl would declare war the following day.
The article says that half the semiconductors come from American companies, and half of their product is made in the US.
So half of half is a quarter, right?
@Inside Looking Out:
“What if China refuse to sell US chips during the war?”
China would not kill the golden goose. The semiconductor industry is a big boon to their economy, as it is to ours.
If China we’re to cut off the electronics trade with the United States, my Chinese colleagues would be unemployed. I would become unemployed here in the USA, too.
China is not so communist that millions of unemployed factory workers, engineers, and business people wouldn’t cause plenty of domestic trouble in China, too. These folks know how to work in teams and get things done, and it’s best for everyone of the thing they’re doing is “selling electronics to the Americans for profit.”
Cutting off international trade is bad for business, and a healthy global business sector benefits both China and the United States. While there are winners and losers within the United States, global trade makes the United States wealthier overall.
China isn’t as influential as it believes or many in the USA believe. China has tried to bully Australia through trade embargoes and tariffs. It has failed miserably. Australia isn’t that big of an economy. The USA has a massive global network and allies.
The US is quietly putting pressure by getting allies not to ship new advanced semiconductor equipment and blocking chinese acquisitions of companies.
https://foreignpolicy.com/2021/06/22/biden-semiconductors-south-korea-china-trade-war/
https://indianexpress.com/article/technology/tech-news-technology/the-tech-cold-wars-most-complicated-machine-thats-out-of-chinas-reach-7389429/
Agreed. A lot of countries aren’t touching Chinese tech like 5G. India does not get along with China. China is going to become more isolated.
But the fact is US does not have chips it needs. Not some fancy hi tech 7 nm chips but regular old tech auto chips/controllers.
“Trade wars are easy to win” The president said. China is now applying a little pain that they can always turn up to retaliate.Toyota learned years ago with the rare earth metals China was slow to export.
Anything they can do to make it look like Ram is not kicking them in the rear.
Produce what makes you the most money. Makes sense to me.
Hasn’t general motors prioritized production of pickups to the detriment of all other types/styles of vehicles for decades now? This is a “Sky is blue” headline. We should stop calling GM, Ford and Chrysler/Stellantis auto companies and just call them “pickup truck companies”.
Understandably GM is prioritizing truck production but eventually trucks will not be as popular and the cash cow will dry up. There will be a limit to how much people will pay for a truck and how long a loan period can be extended but for now GM, Ford, and Stelantis might as well make as many trucks as they can sell. Also fuel prices will go up and for those who do a lot of driving this will eventually affect the purchase of large trucks and suvs.
this is manufactured crisis meant to create such a shortage customers will accept electrics.