Sep 3, 2021 - Economy

Chip shortage forces General Motors to idle North American plants

Jacob Knutson

An incomplete GMC Hummer EV at a factory in Detroit in August 2021. Photo: Bill Pugliano/Getty Images

General Motors will temporarily shut down eight of its 15 North American assembly plants for a week starting Monday because of a worsening global microchip shortage, according to ABC News.

Why it matters: The coronavirus pandemic and other disasters have disrupted supply chains for semiconductors, which are crucial for thousands of computer-controlled systems in new vehicles.

The shortage has forced GM to reallocate the chips it does have to a small number of plants that produce the company's most popular and profitable vehicles, such as its SUVs and pickups, according to CNN.

The big picture: The chip shortage has caused new vehicle inventory to fall, leading to higher prices that fuel inflation, Axios' Felix Salmon reports.

Relief for automakers and other producers that require semiconductors appears to be on the horizon as chip producers ramp up production to meet demand.

Go deeper: Carmakers’ chip shortage that caused prices to soar may be ending

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Chip shortage forces General Motors to idle North American plants

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