GM recently announced that production at two plants would be halted this week. Production will be suspended today and will only resume on Monday, 5 September.
The main Mexican plant (Silao) and the Bowling Green plant - which is responsible for building the Chevrolet Corvette - will run idle for the next seven days as GM is hit by yet another round of parts and supply chain issues. While truck assembly is running idle in Mexico, the three truck plants in the USA will run as per usual, even going as far as adding extra shifts this coming weekend.
GM's production has been stable in the third quarter though supply chain issues remain challenging.
Oddly, the parts shortage is unrelated to the ongoing semiconductor chip shortage, though GM did not state which part(s) are responsible for the shutdown. In early July, it was reported that GM had around 95,000 partially built vehicles waiting in the company inventory. Back then, the main culprit was semiconductor chips.
The shutdown could not have come at a worse time for GM. Sales of its trucks are stronger than ever, once again challenging (albeit cumulatively) the might of the Ford F-150 on the sales charts with the GMC Sierra and Chevrolet Silverado. However, Ford also continues to struggle with parts shortages, and its stockpiles of unfinished trucks in Kentucky have grown to the point of being visible from space.
Considering the parts shortage, it makes sense for GM to focus on US production. The truck division is more profitable than the supercar division could ever hope to be.
The Silao plant is responsible for building Silverado, Sierra, and Cheyenne. Demand for these three vehicles is relatively low in Mexico compared to the States.
GM is also in the midst of an EV revamp, led by the Hummer EV. Hummer was struggling to meet demand and built only 12 cars per day when we checked in. At that production rate, it will take 17 years to clear the waiting list, which does not bode well for the upcoming, more affordable Silverado EV.
The Bowling Green facility has been through hell for the last 12 months. In addition to parts shortages, the facility also had to deal with strikes and a tornado ripping through the facility.
The waiting list for a standard C8 is already insane, and production of the highly-anticipated Corvette Z06 is set to start in September. These additional delays will further upset the market, leading to more desperate customers paying the extreme markups we've seen lately.
Chevrolet has been highly strategic with Z06 allocations and implementing various strategies to keep nefarious dealers and car flippers from making a quick buck from the current circumstances. Still, this most recent shutdown certainly won't help alleviate the problem.
