The global shortage of semiconductor microchips is causing more pain for automakers.
General Motors (NYSE:GM) and Ford Motor Co. (NYSE:F) have each announced that they are temporarily idling or extending shutdowns at several plants in North America due to the ongoing semiconductor microchip shortage.
For GM, the plant closures range from a week or two to several additional weeks for plants that have already been idled due to the parts disruption. GM also said that it will restart production of midsize pick-up trucks after a two-week shutdown due to the shortage at a plant in Missouri.
Ford’s updated plans include additional downtime at two plants in Illinois and Missouri through next week and temporarily shutting down its Flat Rock Assembly plant in Michigan for a week. Impacted vehicles include the Ford Explorer and Lincoln Aviator SUVs, Ford Mustang and Transit transport van.
Semiconductors are key components used in the infotainment, power steering and braking systems of vehicles. As automotive plants shutdown last year due to the pandemic, suppliers directed semiconductors away from automakers and to other industries such as video games, creating a shortage after consumer demand snapped back stronger than expected.
Consulting firm AlixPartners estimates that the microchip shortage will cost the worldwide automotive industry $60 billion in lost revenue this year.
