GM plans changes in the supply chain over Chip shortage, says Mary Barra

On Friday, General Motors Chief Executive Mary Barra announced that the automaker plans to change the working of its supply chain to counter the effects of the global semiconductor chip shortage that led to production cuts.

Reuters reported that Barra said, "We're going to make some pretty substantial shifts in our supply chain. We're already working much deeper into the tiered supply base because generally, General Motors doesn't buy chips (directly) but (our suppliers do). But now we're building direct relationships with the manufacturers."

While posting upbeat second-quarter sales in June, the company mentioned that the global semiconductor shortage remains a serious issue for the automotive industry.

In the first week of September, GM announced significant production cuts at its North American plants due to the semiconductor chip shortage.

The automaker said that it would add or extend downtimes at eight plants in the U.S., Canada, and Mexico. Most of the new cuts would continue for two weeks. The production of its Silverado 1500 and Sierra 1500 full-size pickups in Indiana and Mexico would resume after a week of downtime starting September 13.

On Thursday, the automaker extended the shutdown of a Michigan assembly plant to mid-October amid the recall of its Chevrolet Bolt electric vehicles, after reports of 12 fires and three injuries, due to battery issues.

The new production cuts include a plant in Lansing that makes the Chevrolet Traverse and the Buick Enclave.

On Wednesday, the U.S. Commerce Department announced a meeting on September 23 at the White House with automakers and others "to discuss the ongoing global chip shortage, the impact the Delta variant has had on global semiconductor supply chains, and the industry’s progress toward improving transparency."

Picture Credits - Fortune

Inputs from Reuters