Supply chain issues have racked up prices on all kinds of goods this year. Many influences are fueling the post-pandemic inflation rate, but one of the key factors has been the
microchip shortagewhich has hit the auto industry exceptionally hard.
Now, as experts say the shortage will last until 2023,
General Motors(GM) says it plans to halt production in eight North American factories this fall.
This is the second time the auto giant has pressed pause on production this year. At least five plants were temporarily shut down in April—four in the U.S. and one in Canada.
They aren’t the only automakers facing production slow-downs. Competitors like
Ford, Honda, Mitsubishi, Nissan, Toyota, and Volkswagen have also temporarily closed plants this year because of the lack of microchips.
What plants will GM close?
New York Timesreports that four of the eight plants planned for temporary closure are in the U.S.—Fort Wayne, Indiana’s, Wentzville, Missouri’s; Spring Hill, Tennessee’s, and one in Lansing, Michigan. The other four are in Mexico (3) and in Canada (1).
Many of these plants already experienced downtime in April and July. As of the end of May, the semiconductor shortage had already cut the production of 278,000 GM vehicles, according to
The closures mostly affect the production of GM’s full- and midsize pickup trucks, including GMC Canyons and
Sierrasas well as Chevrolet’s Silverados and Colorados.
Other models affected include Chevy’s Cheyenne, Traverse, Equinox, and Express, GMC’s Acadia, Savana, and Terrain, Buick’s Enclave, and Cadillac’s XT5 and XT6.
How are other automakers weathering the chip shortage?
GM had to make some tough decisions this year, but the automaker is actually faring better than some of its rivals.
Reuterssays the company bounced back from a slow first quarter, making a second-quarter net income of $2.8 billion.
Ford, on the other hand, reported a 50% decrease in its second-quarter profits. The U.S. brand’s sales were down 33% in August. Like GM, the company has slowed down production, removing features, and redesigning parts to use more accessible chips.
How do I save on car ownership costs during the chip shortage?
As you could probably guess, the auto industry’s struggle to keep up with demand has sent the price of new cars skyrocketing. As a result, used car prices are also on the rise.
Buying a car right now is tough, but there are ways to keep other costs of ownership down. The easiest way is to shop for car insurance with
Jerry is a personal insurance broker that lives in your pocket. But don’t worry about buying tiny office furniture, Jerry is an app.
Once you download Jerry, just answer a handful of questions that will take you roughly 45 seconds to complete and you’ll immediately get car insurance quotes for coverage similar to your current plan. Jerry customers save an average of $879 a year.