General Motors Co GM and Ford Motor Co F are extending production cuts at some of their manufacturing facilities in the United States, Reuters reported on Thursday, citing the companies.
What Happened: The two automakers are cutting additional production due to the ongoing semiconductor shortage that is expected to run into a second year and has already messed up global automotive supply chains and inventories.
GM, the largest U.S. automaker by volume, will extend a halt to Chevrolet Blazer sport utility vehicle production at its Ramos plant in Mexico for two weeks. Production of the Blazer will not resume before Oct. 15, as per Reuters.
It plans to resume production at its Lansing Grand River Assembly plant that builds the Chevrolet Camaro and the Cadillac CT4 and CT5. In Michigan, it has halted production for Cadillac since May.
Ford will halt production at its Flat Rock Assembly Plant where it builds the Mustang. The Dearborn, Michigan-based automaker will also halt production of the Transit next week at its Kansas City Assembly Plant but it will continue to build F-150 trucks. The Kentucky Truck Plant will move to a single shift next week from the three normal shifts.
Why It Matters: Automakers across the globe are rushing to build their most profitable models first as they struggle to secure key semiconductors essential to make a fully functional vehicle.
A global chip shortage started last year in the aftermath of COVID-19-induced lockdowns as demand sprung back up, quickly surpassing expectations. Most chipmakers don't expect the shortage to ease until late 2022.
Price Action: GM shares closed 0.42% lower at $52.71 a share on Thursday. Ford shares closed 0.98% lower at $14.16.
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