Detroit’s GM extends output cuts due to chip shortage; Stellantis flags further pain

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Detroit’s GM extends output cuts due to chip shortage; Stellantis flags further pain

On Wednesday, General Motors Co., the United States’ No 2 automotive industry giant by market valuation behind Tesla Inc., had stretched out output cuts at three of its North American manufacturing plants, while Stellantis, the merger between Anglo-Italian FCA and French Groupe PSA, had raised a red flag over an ongoing chip shortage citing that a lingering pain over shortages of semiconductors might deepen further as the year would progress.

Nonetheless, latest extension of output cut in General Motors factories would highly unlikely to alter a GM estimate made last month that said the Detroit carmaker would take a header of up to $2 billion from this year’s earnings due to a steep shortage in semiconductors, suggested analysts, while GM CFO (Chief Financial Officer) Paul Jacobson was quoted saying in a statement late in the day that the chip supplies should be back into a normal phase by the later half of the year while expressing an stringent optimism that the company’s operational profits would not be hurt by a long-running display of a lacklustre global chip supply.

Stellantis expects financial hits from chip shortage at least until late-2022

On the contrary, Stellantis, the fourth-largest automotive industry behemoth across the globe formed by a $50 billion merger between Italian-American Fiat Chrysler and the French Peugeot maker Groupe PSA, said in a separate statement earlier in the day that the chip shortage would last far into the year, though the carmaker did not offer a precise estimate of the fiscal hit it was expecting from the recent leg of global-scale chip shortage in automotive industry.

If truth is to be told, a confluence of corrosive factors had led to a lull in global semiconductor supplies this year as consumers appeared to have flocked a flurry of electronic products likes of laptops, gaming consoles alongside others during the pandemic-led restrictions, leading to a sheer shortage in global chip supplies.