Major Auto Manufacturers make adjustments due to Chip Shortage

Last Friday, General Motors Chief Executive Mary Barra said the largest U.S. automaker plans to make changes in its supply chain as it works to address the continuing semiconductor chip crisis that has forced significant production cuts.

“We’re going to make some pretty substantial shifts in our supply chain,” Barra said in an online interview. “We’re already working much deeper into the tiered supply base because generally General Motors doesn’t buy chips (directly) but (our suppliers do). But now we’re building direct relationships with the manufacturers.” On Thursday, GM said it was cutting production at six North American assembly plants due to the shortage, and earlier this month, the company was forced to temporarily halt production at most North American assembly plants because of the shortage.

Next week, the White House and the U.S. Commerce Department plan a meeting on the chip crisis, which has caused production cuts by automakers around the world, including Daimler AG’s Truck division, the world’s largest, which has seen the supply of crucial chips tighten further in recent weeks, the division’s chief executive Martin Daum said in a Frankfurter Allgemeine Sonntagszeitung report. “Since the summer months the situation has intensified again,” he told the weekly newspaper, adding this had affected production in Germany and the United States.

Daum said that order books were filled but due to the shortage which was hit all major carmakers, stockpiles had gone up massively. “There are significant inventories of already produced vehicles where essential parts are lacking. Those vehicles are badly needed by our customers. We would like to deliver but we are waiting for the parts.” Daum said the tightening of supply could have a major impact on unit sales in the third quarter, adding he saw no signs of a fast recovery and the issue would stay with the sector for a while.

And last Thursday, Chrysler parent Stellantis NV said it was also cutting additional production at three plants in the United States and Canada because of the shortage. Barra says the issue is a “solvable problem, but it’s going to be here a little longer.”

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