Chip Flow Increasing for GM

General Motors Co. is seeing an increased flow of semiconductor chips, allowing the Detroit automaker to operate every plant this week. The auto manufacturer has even scheduled overtime at several plants in recent weeks. 

“We are currently seeing a better flow of semiconductors in our supply chain, our North American assembly plants are now back to running regular production, and volumes are increasing in the fourth quarter,” reported GM spokesman Dan Flores in a statement.

He added, “We have made some weekend overtime scheduling adjustments at several of our plants in November and December. This includes Arlington, Ft. Wayne, Wentzville, Lansing Delta Township, Lansing Grand River and Silao, which have been working select weekend overtime shifts.”

GM reported its Wentzville, Missouri, mid-size truck plant is down for several weeks for “construction updates” in departments that support production of its next-generation mid-size trucks. The Orion Assembly, the Chevrolet Bolt EV and EUV plant, also is down through Jan. 28 as the company addresses recalls and provides battery supply to the affected vehicles. 

Automakers have battled the semiconductor shortage since January and industry leaders predict the effects will last into next year. Still, analysts at Fitch Ratings Inc. report they expect to see gradual improvement in semiconductor supply in 2022.

“Semiconductor availability should modestly increase sequentially through 2022, but supply chains remain vulnerable to potential event risk because of the trajectory of the pandemic,” the firm reported.

The shortage led automakers to halt production at some plants and limited inventory at U.S. dealerships. Tight inventories pushed prices to record-high prices. In October, average new-vehicle prices surpassed $46,000, according to Kelley Blue Book. 

Fitch predicts “the supply/demand mismatch that led to very strong vehicle net pricing and mix in 2021 will continue” in the first half of 2022. The firm noted that increasing production and rebuilding of inventory levels in the second half of 2022 could cause automakers’ “operating margins to come under pressure.”