Extended production cuts due to chip shortage by GM, Stellantis warns of lingering pain.
The global semiconductor chip shortage led General Motors Co on Wednesday to expand production cuts at three North American plants and put on a fourth to the list of factories hit, and Stellantis to warn for the lingering pain far into the year.
GM Chief Financial Officer, Paul Jacobson in due course said, “Chip supplies should return to normal rates by the second half of the year.” They also believe that the profit hit would not worsen.
However, Stellantis on Wednesday avoided giving an estimate for the financial hit they are expecting this year from the shortage and said that issue might last into the second half of 2021.
The consumers also have stocked up on laptops, gaming consoles, and other electronic products during the pandemic, leading to tight chip supplies.
GM are still hiding the impact on volumes and the supplier or parts which were affected by chip shortage, but the U.S. maker told that they intend to recover as much of the lost output as possible.
“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs.”, GM spokesman David Barnas said.
Last week, U.S. President Joe Biden said that he was looking forward to $37 billion in funding to supercharge chip manufacturing in the United States.