December 2, 2021

Chip shortage forces General Motors to idle North American plants – Axios

General Motors will temporarily shut down eight of its 15 North American assembly plants for a week starting Monday because of a worsening global microchip shortage, according to ABC News.

Why it matters: The coronavirus pandemic and other disasters have disrupted supply chains for semiconductors, which are crucial for thousands of computer-controlled systems in new vehicles.

  • The shortage has forced GM to reallocate the chips it does have to a small number of plants that produce the company’s most popular and profitable vehicles, such as its SUVs and pickups, according to CNN.

The big picture: The chip shortage has caused new vehicle inventory to fall, leading to higher prices that fuel inflation, Axios’ Felix Salmon reports.

  • Relief for automakers and other producers that require semiconductors appears to be on the horizon as chip producers ramp up production to meet demand.

Go deeper: Carmakers’ chip shortage that caused prices to soar may be ending