Barra: GM to make ‘substantial changes’ in chip supply chain

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Mary Barra, CEO of General Motors, attends the Allen and Co. Sun Valley annual press conference in Sun Valley, Idaho, United States on July 12, 2019. REUTERS / Brendan McDermid / File Photo

WASHINGTON, Sept. 17 (Reuters) – General Motors Co (GM.N) chief executive Mary Barra said on Friday that America’s largest automaker plans to make changes to its supply chain as it was working to deal with the lingering semiconductor chip crisis that has forced major production cuts. .

“We’re going to make some pretty big changes in our supply chain,” Barra said in an online interview. “We are already working a lot deeper into the multi-level supply base as General Motors generally does not buy chips (directly) but (our suppliers do). But now we are building a direct relationship with the manufacturers.”

A GM spokesperson declined to comment further on how the company might change its supply chain.

Next week, the White House and the US Department of Commerce are planning a meeting on the chip crisis, which has caused production cuts among automakers around the world.

On Thursday, GM said it was cutting production at six North American assembly plants due to the shortage. Read more

Earlier this month, the company was forced to temporarily halt production at most North American assembly plants due to the shortage.

Chrysler’s parent company, Stellantis NV (STLA.MI), said this week it was cutting additional production at three plants in the United States and Canada due to the shortage.

Barra said on Friday that the problem was a “solvable problem, but it’s going to be there a little bit longer.”

GM CEO, interviewed by Delta Air Lines chief Ed Bastian in a series of talks with other CEOs, said some newer GM vehicles have up to 30% more chips than ‘other vehicles.

“As customer needs change, we need more and more semiconductors,” said Barra, saying GM was looking for short, medium and long term solutions to the shortage.

GM Chief Financial Officer Paul Jacobson last week reaffirmed the automaker’s earnings outlook for 2021 and said the company expects a “more stable year” in 2022 for semiconductor supplies. Read more

Jacobson warned that GM’s third-quarter wholesale deliveries could be down 200,000 vehicles due to chip shortages and because GM moved production to the second quarter as it managed semiconductor supplies.

Reporting by David Shepardson; edited by Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.


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