GM is extending the plant shutdown to three plants due to a lack of chips

General Motors is extending temporary shutdowns at three assembly plants until mid-March due to a global shortage of semiconductor chips.

The affected plants are in Kansas; Ontario, Canada; and San Luis Potosi, Mexico. They produce the Chevrolet Malibu and Buick Encore sedan, Cadillac XT4, GMC Terrain and Chevy Equinox and Trax.

The closures, which were originally scheduled to last until this week, will be re-evaluated in mid-March. These are intended to ensure that the company has enough semiconductor chips to produce its most profitable trucks and SUVs.

“The supply of semiconductors remains an issue facing the entire industry,” GM said in a statement. “GM’s plan is to leverage every available semiconductor to build and deliver our most popular and sought-after products, including large trucks, SUVs and Corvettes to our customers.”

Cox Automotive says GM’s Malibu deliveries and crossovers are higher than what the industry usually considers “healthy,” which means the carmaker can afford to cut production at factories.

Semiconductors are extremely important components of new vehicles for areas ranging from infotainment systems to more traditional parts, such as power steering. They are also used in consumer electronics.

Automakers and parts suppliers began warning of a shortage of semiconductors late last year after demand for vehicles returned more strongly than expected after a two-month shutdown of production plants last spring due to the coronavirus pandemic.

This week, Ford Motor had to reduce the production of its highly profitable F-150 trucks due to lack of chips. The company said it failed to prioritize the production of pickups because they use unique chips compared to other models.

Ford said last week that the shortfall could reduce its earnings by $ 1 billion to $ 2.5 billion this year.