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General Motors extends production cuts due to chip shortage

The global semiconductor chip shortage led General Motors on Wednesday to expand production cuts at three North American plants and add a fourth to the list of factories hit.

The extended cuts do not modify the automaker’s forecast last month that the shortage could shave up to $2 billion from this year’s revenues. GM Chief Financial Officer Paul Jacobson subsequently said chip supplies should return to normal rates by the second half of the year and he was confident that the impact on profit would not worsen.

The chip shortage, which has hit automakers worldwide, emerges from a confluence of factors as carmakers, which closed plants for two months during the COVID-19 pandemic last year, rival against the sprawling consumer electronics industry for chip supplies.

GM did not reveal the impact on volumes or say which provider or parts were affected by the chip shortage, but the U.S. automaker said it aims to recover as much of the lost output as possible.

“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs,” said GM spokesman David Barnas. “We contemplated this downtime when we discussed our outlook for 2021.”

GM said it would extend downtime at the plants located in Fairfax, Kansas, and Ingersoll, Ontario, to at least mid-April, and in San Luis Potosi, Mexico, through the end of March. In addition, it will idle its Gravatai plant in Sao Paulo, Brazil, in April and May.

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