GM Extends Auto Plant Closures Due To Chip Shortage

A global semiconductor chip shortage continues to affect the automotive industry on both sides of the United States-Mexico border.

General Motors Co. GM recently said it has extended production cuts at three North American plants, including its facility in San Luis Potosí, Mexico, through the end of March.

The GM factory in San Luis Potosí produces the Equinox, the Chevrolet Trax and the GMC Terrain SUVs.

Other GM plants that will be affected, until at least mid-April, are facilities in Fairfax, Kansas, and Ingersoll, Ontario. GM's Gravataí facility in Sao Paulo will also be halted until at least April.

Due to the closure of the GM plant in San Luis Potosí, up to 15 auto parts suppliers in Mexico have also been affected, according to Oscar Albin, president of Mexico's National Auto Parts Industry (INA).

Albin said chip shortages affecting automaker Stellantis STLA could affect up to seven parts suppliers in the Mexican city of Toluca. Fiat Chrysler Automobiles and Groupe PSA merged in January to create Stellantis. 

In February, Stellantis furloughed thousands of workers across North America as it tried to adjust production due to semiconductor chip shortages.

Even with auto plants in Mexico halting production, Albin said he is optimistic that Mexico's automotive industry will rebound in 2021.

"The automotive industry was down so much in 2020, compared to 2019, that we could see production increase as much as 24% this year; we will come back to the level of 2019," Albin told FreightWaves. 

The semiconductor chip shortage stems from several factors, including the COVID-19 pandemic, increased demand for laptops and home electronics, as well as a winter storm in Texas that shut down several chip-manufacturing facilities.

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