GM extends closure of Ontario factory as semiconductor chip shortage deepens

General Motors Co. said on Tuesday it was extending production cuts at three North American plants until at least mid-March due to the global semiconductor chip shortage, while vehicles at two other factories would only be partially built.

GM, whose shares dipped 1 per cent after the announcement, did not disclose the impact volumes or say which supplier and vehicle parts were affected by the chip shortage.

But it said it would focus on keeping production running at plants building its highest-profit vehicles, full-size pickup trucks and SUVs. GM said it intended to make up as much lost production as possible once the shortage chip eased.

"Semiconductor supply remains an issue that is facing the entire industry. GM's plan is to leverage every available semiconductor to build and ship our most popular and in-demand products," GM spokesman David Barnas said.

GM said it was extending downtime at its U.S. plant in Fairfax, Kansas, its Canadian factory in Ingersoll, Ontario and its Mexican facility in San Luis Petosi until mid-March when it would reassess the situation, he said.

In addition, GM would build but leave incomplete for final assembly vehicles at Wentzville, in the U.S. state of Missouri and its Mexican plant at Ramos Arizpe.

GM vehicles affected by the idled plants include the Chevrolet Malibu sedan, Cadillac XT4 SUV, Chevy Equinox, and GMC Terrain SUVs. Vehicles to be left incomplete for now included the Chevy Colorado, GMC Canyon pickups and Chevy Blazer SUV.

This week, GM had said it was idling the three factories where it has now extended downtime and said it would halve production at a plant in South Korea.

The chip shortage has affected many automakers, including Toyota, Volkswagen, Stellantis, Ford Motor Co, Renault, Subaru, Nissan , Honda and Mazda.

Asian chipmakers are rushing to boost production but say the supply gap will take many months to plug. German chipmaker Infineon said the shortage would get worse in the near term.

The chip shortage is expected to cut global output in the first quarter by more than 670,000 vehicles and last into the third quarter, IHS Markit said. AutoForecast Solutions estimated total lost production this year could reach 1 million vehicles.

Honda and Nissan said on Tuesday they would sell 250,000 fewer cars in total this financial year due.

Ford said last week the shortage was hitting production of its highly profitable F-150 pickup trucks, saying it could lose 10 per cent to 20 per cent of planned first-quarter vehicle production and earnings could fall by $1 billion to $2.5 billion.

Stellantis said it would idle its Canadian minivan plant in Windsor, Ontario for three weeks until the end of February.

Taiwan, home to the world's largest contract chip maker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), is at the center of efforts to resolve the shortage. U.S. officials discussed the issue with their Taiwanese counterparts last week.

Chinese officials said on Tuesday they had met auto and chip companies, asking them to help ease the shortage. French state officials meet auto and electronics industry leaders on Wednesday to discuss the issue.