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GM To Make Changes In Supply Chain Over Chips, Says CEO Barra

GM To Make Changes In Supply Chain Over Chips, Says CEO Barra
The largest American auto company General Motors Co is planning to bring in changes to its supply chain as a part of its strategy to combat the continuing global semiconductor chip shortage that has prompted mots companies to curb production, said the firm’s Chief Executive Mary Barra on Friday.
"We're going to make some pretty substantial shifts in our supply chain," Barra said in an online interview.
"We're already working much deeper into the tiered supply base because generally, General Motors doesn't buy chips (directly) but (our suppliers do). But now we're building direct relationships with the manufacturers," she added.
There was however no clarity on how the company would change its supply chain.
A meeting on the current global auto chip crisis and its impact o the auto industry in the country is being planned to be held between the White House and the United States Commerce Department.  
The shortage has forced GM to plan production cuts at six North American assembly plants, the company had announced on Thursday. This chip crisis had also forced the company to temporarily halt production at most North American assembly plants earlier this month.
Earlier this week, an announcement of an additional cut in production at three plants in the United States and Canada because of the global chip supply shortage was announced by Chrysler parent Stellantis NV.
The issue is a "solvable problem, but it's going to be here a little longer", Barra said Friday.
There are up to more than 30 per cent more chips in some of the newer GM vehicles compared to the company’s other vehicles, said the GM CEO during an interview by Delta Air Lines chief Ed Bastian as part of a series of discussions with fellow CEOs.
"As customer needs are shifting, we need more and more semiconductors," Barra said, and added that the company was seeking to achieve long, medium and short term solutions to the chip crisis.
The 2021 profit outlook of the company was reiterated last week by GM Chief Financial Officer Paul Jacobson while saying that the American auto maker expects a "more stable year" in 2022 with respect to supply of semiconductor chips.
However, Jacobson cautioned that the third quarter wholesale deliveries of GM could go down by about 200,000 vehicles due to the global chip crisis as well as GM’s decision to shift some planned production from the third quarter to the second quarter as there was adequate supplies of semiconductors.

Christopher J. Mitchell

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