GM is reducing additional cuts at two US truck factories due to a lack of chips

General Motors is reducing overtime production this weekend at two US assembly plants that make their large pickups extremely profitable due to the ongoing shortage of semiconductor chips affecting the global auto industry.

The plants in Flint, Michigan and Fort Wayne, Indiana, produce a mix of the company’s full-size pickups, including the Chevrolet Silverado and GMC Sierra 1500, as well as their older siblings.

This is the first time the Detroit automaker has reduced production cuts for its full-size pickups due to a lack of chips for a month. GM has significantly reduced production at its North American car and crossover factories to prioritize pickup chips as well as the company’s full-size SUVs.

In total, GM eliminates three overtime shifts between the two factories on Saturday and Sunday.

“As we continue to manage the impact of semiconductors on our plants, we balance the availability of parts with our ability to run efficiently for the entire week,” GM said in an email.

GM also produces the 1,500 versions of the Silverado and Sierra pickup at a factory in Mexico.

In addition to exchange reductions, GM said Friday that it is canceling scheduled downtime in the weeks of June 28 and July 5 at all U.S. plants except one medium-sized truck factory in Missouri. GM hopes that production in those weeks, traditionally known as the summer break, will help recover lost production in the first half of the year.

The changes come a day after GM and Ford Motor announced plans to temporarily move or extend shutdown at several factories in North America.

GM CEO Mary Barra and Ford CEO Jim Farley are expected to attend a virtual CEO summit with the Biden administration on Monday to discuss the global shortage of semiconductors.

Semiconductors are key components in automobile production and are used, among others, in infotainment, power steering and braking systems. As more factories closed last year due to Covid, suppliers have shifted semiconductors away from carmakers to other industries, creating a shortage after consumer demand returned stronger than expected. Car parts can contain several sizes and different types of chips.

For months, GM and Ford have been prioritizing assembling high-margin vehicles, such as large pickups, by reducing the production of cars and crossovers. Companies even partially build pick-ups for completion and delivery at a later date.

GM expects the lack of chips to reduce its operating profit by $ 1.5 billion to $ 2 billion this year, while Ford said the situation could reduce its profits by $ 1 billion to $ 2.5 billion. dollars in 2021.

The consulting firm AlixPartners estimates that the chip deficit will reduce revenues from the global automotive industry by $ 60.6 billion this year.