The auto industry is one of the many that have suffered major monetary loss due to the coronavirus pandemic. Previously, auto companies have shut down their plants for brief amounts of time due to an ongoing shortage of necessary parts. Most recently, however, GM has chosen to halt production at nearly all their plants for about two weeks. The choice is no doubt a difficult one. However, it’s really the only feasible option for vehicle production plants right now.
As those in search of new vehicles are well aware, the product shortage has made for bare car lots and incredibly pricey vehicles. The contemporary issues have further affected used-car lots and shoppers. Used cars currently sell at prices that would typically go for significantly less.
The Tennessean stated the part specifically responsible for handicapping the auto industry is the very necessary semiconductor chips. GM Spokesman Dan Flores couldn’t state whether the chip shortage is a result of a high rate of COVID-19 infections among overseas employees or due to government restrictions on production plants. As a result, GM decided to shut down nearly all assembly plants in North America beginning this Monday.
Flores told the press, “All the announcements we made today are related to the chip shortage.”
The brand giant stated that only four plants will continue to function amid the shutdown. Their locations range as far south as Texas and as far north as Michigan.
Ford Also Decided to Reduce Production Among Chip Shortages
GM’s announcement is groundbreaking as the brand decided to halt production overall. Although, other renowned brands have decided to slow production as well. Yesterday, Ford announced it will also cut its United States truck production.
Reuters stated that Ford, the second-largest U.S. automaker, plans to eliminate two of three shifts at one plant next week. Even more detrimental is that its Kansas City Assembly Plant plans to completely halt F-150 production. The brand’s Ford F-Series pick-ups remain America’s bestselling vehicles.
The shortage also comes as a result of increased at-home schooling and remote work opportunities that emerged during the pandemic. Chip production plants and agencies admitted they did not expect such heavy demand for at-home electronics throughout the pandemic. The Tennessean stated small electronics such as laptops also depend on the chips.
Mixcomm CEO Mike Noonen told Forbes, “We are now in a world where every industry is either enabled by or dependent upon semiconductors.”
Unfortunately for automakers, the Wall Street Journal reported that Volkswagen highlighted that the crisis may only get worse in the next several months. GM’s spokesperson concluded that unfortunately they, as well as other automakers, can’t make predictions for how the situation will pan out.
“We manage this on a day-to-day basis,” Flores said.