General Motors (NYSE: GM) has decided to temporarily halt production within several North American plants as a result of the continuous semiconductor chip shortage that has affected the auto industry. Nevertheless, it has decided to continue production in its Missouri plant which manufactures its midsize pickups.
The automaker revealed that the shortage could rank up to USD2 Billion in lost earnings for 2021, however CEO Marry Barra anticipates chip provisions will be in stock by the second second half of the year.
“We continue to work closely with our supply base to find solutions for our suppliers’ semiconductor requirements and to mitigate impact on GM,” GM spokesman David Barnas said in an email. “Our intent is to make up as much production lost at these plants as possible.”
Semiconductors are necessary tools utilized in the infotainment, power steering and braking systems, as well as other components. As a consequence of the Covid-19 pandemic and the closure of various plants within the industry, suppliers redirected semiconductors to other businesses, ultimately causing the shortage.
The company is anticipated to make USD10 Billion to USd11 Billion in adjusted pre-tax profits for 2021. Furthermore it expects adjusted free cash flow of USD1 Billion to USD2 Billion within its automotive branch for this year.
GM CFO Paul Johnson said he felt “increasingly content” that the company would meet its earnings goals for the year in spite of the ongoing plant closures.