General Motors assembly lines operate regularly in factories that make pickup trucks and large SUVs. Vehicles drive off the lines on a car transporter.
But instead of going to dealerships, vehicles are taken to giant parking lots to wait for the arrival of the semiconductor chip parts needed to finish assembling them, and then shipped to showrooms.
It’s part of GM’s timid build strategy that has allowed the automaker to largely maintain its most profitable vehicle factories despite a global shortage of semiconductor chips used in a variety of auto parts. This helps GM maintain its revenue stream.
It wasn’t until recently that GM had to slow down its full-size pickup truck factories. But its full-size SUV plant in Texas hasn’t taken any downtime, and vehicles are piling up. As of Wednesday, more than 10,000 large SUVs are waiting for parts to be completed.
While GM will not confirm the exact number of vehicles awaiting final assembly, sources at various factories say it is again in the tens of thousands despite GM’s work to reduce the number. Earlier this summer, workers at Wentzville Assembly in Missouri completed some 30,000 mid-size pickup trucks that had beenpending parts and ship them to dealers.
Still, GM executives say they believe production will improve later this year.
“We are monitoring this on a weekly basis,” GM CFO Paul Jacobson said of the chip crisis on a media call Wednesday. “That’s why we’ve been careful with our outlook from the start.”
1,000 per day
According to information obtained by the Free Press, Wednesday afternoon, there were 10,579 full-size SUVs built at Arlington Assembly parked in central Texas awaiting parts before they could be completed and shipped to showrooms. GM builds its full-size Cadillac Escalade, Chevrolet Tahoe and Suburban and GMC Yukon SUVs in Arlington, which is located between Fort Worth and Dallas.
âIt looks like we’re averaging about 1,000 a day. I say this because as of Tuesday, July 27, there were just over 3,300 floating around,â said an hourly Arlington Assembly employee with acquaintances but who asked not to be named because he is not authorized to speak to the media. “Since then it has grown by 1,000 every day.”
According to GM’s website, it builds about 1,200 vehicles a day in Arlington.
In Missouri, some 9,275 midsize trucks from the Wentzville assembly plant are awaiting completion Tuesday night, and more are on their way, according to another knowledgeable source who also asked not to not be named because he is not authorized to speak on the news. media.
At Wentzville Assembly, where GM builds its mid-size pickup trucks and Chevrolet Colorado and GMC Canyon vans, the plan is to continue building 15,000 more pickup trucks and store them while awaiting parts, the person in charge said. GM declined to confirm the numbers in this story.
In mid-July, a worker at the Lansing Delta Township plant told Free Press there were around 15,000 vehicles parked in the area, waiting for chip parts to complete production and ship to dealers. . This person asked not to be identified because the worker is not authorized to speak to the media.
GM’s production outlook
The numbers are big, but not surprising given GM’s timid construction strategy, where it builds as many vehicles as possible, minus the parts that require the chips. It’s a strategy that GM executives say is working. Consider GM’s second quarter earnings.
Wednesday GM announced a second quarter net profit of $ 2.8 billion compared to a net loss of $ 738 million during the period last year. It had adjusted quarterly profit before interest and taxes of $ 4.1 billion, down from a loss of $ 500 million a year ago when the COVID-19 pandemic slowed the industry’s production and halted most car purchases.
During an analyst call Wednesday, Jacobson said that GM’s timid build strategy is, in part, due to the results, as well as the creation of a rich mix of products that, along with the low inventory and high demand keeps prices high.
âIf you look at our production of full-size trucks, we actually get very good results,â said Jacobson. “We think the production of trucks and full-size SUVs (production) is relatively stable. Vehicles built without certain modules are a solid option for us – we are redeploying chips on those vehicles from factories that are down.”
Jacobson said GM production and inventories are expected to improve later this year.
âAs we move into the fourth quarter, some of the semiconductor challenges will ease; we don’t know if that will be resolved, âhe said, but there are some positive indicators that the chip supply will improve later this year.
Car transporter traffic
The person from Wentzville said a car transport truck drives into the Bedrock Quarry in Troy, Missouri about every 20 to 30 minutes to unload a new group of Chevrolet Colorado and GMC Canyon midsize pickup trucks for storage. . It appears there are around 300 to 400 stationed there now, the person said and photos have confirmed.
GM had stored many of the 30,000 midsize pickup trucks previously owned at Bedrock Quarry earlier this year. GM also uses other parking lots across the state for storage.
At GM’s Arlington Assembly, GM stores large SUVs at various locations, one of which is Midlothian, a town about 23 miles south of Arlington, the person who works there said.
Until now, GM has not had a large number of full-size Chevrolet Silverado and GMC Sierra pickups that have been “made” by parts. He was successful in directing chip parts to these vehicles to keep production moving and shipments to dealerships.
âThe (pickup) plant closures we announced yesterday are actually some of the first we’ve made for full-size trucks this year,â said Jacobson.
Last week GM had to suspend production of full-size pickup trucks. This week, production resumed at Flint Assembly, Silao Assembly in Mexico and Fort Wayne Assembly in Indiana. Next, GM announced on Tuesday that pickup production at these three factories will be in slow motion from Monday for a week due to the shortage of chips.
GM builds the full-size Chevrolet Silverado and GMC Sierra pickup trucks in Flint. He builds his full-size lightweight models of these pickups in Fort Wayne and Silao.
This downtime allows GM to complete partially finished vehicles at affected assembly plants and ship those units to dealerships, GM spokesman David Barnas said.
Since the start of this year, the auto industry has had to either slow down assembly plants or build vehicles without all the parts. The result is a limited inventory on dealer lots.
The chips, which are mainly made in Taiwan, are used in various electronic devices. They are in tight numbers after demand for them increased during the COVID-19 pandemic as people bought laptops and other personal electronics that also use them.