Press "Enter" to skip to content

GM, Ford's Temporary Shutdowns Over Chip Shortage Spread To More Factories In North America

General Motors Co (NYSE: GM) and Ford Motor Co (NYSE: F) said on Thursday they will temporarily shut down more North American factories as the ongoing semiconductor chip shortage, which has been hitting production for automakers all over from Detroit to Tokyo, worsens, The Washington Post reports.

What Happened: According to the report, GM will halt production lines in Spring Hill, Tennessee; Delta Township, Michigan; and Ramos Arizpe, Mexico for 1-2 weeks. The automaker is also extending shutdowns that began in February and March at factories in Lansing, Michigan; Kansas City, Kansas; and Ingersoll, Ontario. 

Ford plans to temporarily halt production lines next week in Chicago, Illinois; Kansas City, Missouri; and Flat Rock, Michigan, and cut production in Avon Lake, Ohio.

The temporary production halt at various GM plants, which make the Cadillacs, Buicks among other vehicles, will affect 10,000 GM workers. Ford didn’t say how many workers will be affected.

According to GM, its hourly workers represented by a union will receive about 75% of their compensation through a combination of unemployment and supplemental benefits. While Ford’s permanent employees with over one year of service will receive about 75% of their gross pay during down weeks.

Why It Matters: Ford and other automakers have been focusing on building their most profitable vehicles first but extended production halts indicate the chip shortage is worsening.

The shortage has already disrupted global supply chains and hit automakers everywhere, including Tesla Inc (NASDAQ: TSLA), and is even known to have disrupted tech giant Apple Inc’s (NASDAQ: AAPL) production plans for MacBooks and iPads.

Price Action: GM shares closed 1.22% lower at $60.09 on Thursday and those of Ford 1.73% lower at $12.51.

Read Next: How Hyundai Avoided The Chip Shortage Plaguing Tesla, Other Automakers

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

This post was originally published on this site

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *