GM temporarily shuts down North American factories because of chip shortage

  
Via:  Nerm_L  •  2 months ago  •  17 comments

By:   Andrew J. Hawkins (The Verge)

GM temporarily shuts down North American factories because of chip shortage
GM is temporarily shutting down nine of its North American factories as the auto industry continues to feel the effects of the global semiconductor chip shortage. Many of the company's most profitable vehicles, including trucks and SUVs, are affected.

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So where's the friggin' robots?  Are we supposed to believe that AI controlled robotic automation won't function in the United States?

Chip manufacturing is highly automated.  Producing electronic chips ain't a Milton Friedman buzzkill using shovels instead of bulldozers.  There isn't a need for human resources, unfunded pension liabilities, or diversity training.  They're freakin' machines.

The United States can't even produce what it needs with automation anymore.  Even automated manufacturing is beyond the ability of our business leaders.  Elon Musk can build above ground tunnels and shoot automobiles into space but can't produce electronic chips with robots?

The grand new industrial revolution relying on artificial intelligence and robotic automation won't create jobs in the United States.  We have too many financially brilliant stupid people in charge to allow that to happen.  Our house is in danger of collapse for want of a nail because we can't make nails.


S E E D E D   C O N T E N T



General Motors, parent company of Chevrolet, GMC, Cadillac, and Buick, said it was temporarily halting production at six of its North American factories as a result of the global chip shortage. It's the latest major automaker to be affected by the tight supply of essential computer chips.

Four of GM's US-based plants will be affected: Fort Wayne, Indiana; Wentzville, Missouri; Spring Hill, Tennessee; and Lansing, Michigan. Four other factories in Mexico and Canada will also go dark for several weeks as GM works to shore up its supply of chips. The halt in production will affect GM's most profitable vehicles, including pickup trucks and SUVs.

"During the downtime, we will repair and ship unfinished vehicles from many impacted plants, including Fort Wayne and Silao, to dealers to help meet the strong customer demand for our products," a spokesperson said in an email. "Although the situation remains complex and very fluid, we remain confident in our team's ability to continue finding creative solutions to minimize the impact on our highest-demand and capacity-constrained vehicles."

Affected vehicles include the Chevy Silverado, Cheyenne, Traverse, Equinox, and Express; GMC Acadia, Sierra, Savana, Terrain, and Canyon; Buick Enclave; and Cadillac XT5 and XT6.

This is the second time GM has had to announce temporary factory shutdowns in response to the chip shortage. The automaker, which is the largest in North America, previously idled several factories for two weeks back in April.

Of course, GM isn't alone in feeling the pain from the global shortage of semiconductor chips, which is showing no signs of improvement. Practically every automaker has had to cut production and temporarily shut down factories in response, including Volkswagen, Ford, and Toyota.

Even Tesla, which makes far fewer vehicles than most of its rivals, said that it had to rewrite its vehicles' software to support alternative chips. Tesla CEO Elon Musk said during an earnings call that "the global chip shortage situation remains quite serious."

During a recent earnings call, GM executives wouldn't specify how much production they expect to lose to the chip shortage. But CEO Mary Barra said purchasing, manufacturing, engineering, and sales teams are working to divert the chips from cars and smaller SUVs to full-size pickup trucks, big SUVs, and new electric vehicles. The company stressed that the shortage would cost $1.5 billion to $2 billion in earnings before taxes this year due to lost production.


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Nerm_L
Senior Principal
1  seeder  Nerm_L    2 months ago

Politicians, financiers, and lawyers are in charge.  Grifters, liars, cheats, thieves, and slackers are running the show.

Maybe its time to kick Milton Friedman to the gutter and invest in more shovels.

 
 
 
Ronin2
Masters Quiet
2  Ronin2    2 months ago

The problem isn't getting the chips built here; we can do that if we really wanted to. Right now it is cheaper to manufacture them overseas.

It is the rare earth minerals that are needed in the construct of the chips that is in short supply; and getting tighter. Until the US gets serious about securing the rare earth mineral resources needed; we are going to be at the mercy of China, Taiwan, and others. 

 
 
 
Snuffy
Junior Quiet
2.1  Snuffy  replied to  Ronin2 @2    2 months ago

yep, follow the money.  So long as it's cheaper to manufacture the chips overseas and import them, that is what will happen.  Simple business.  

 
 
 
Drakkonis
Masters Guide
2.1.1  Drakkonis  replied to  Snuffy @2.1    2 months ago

That's what seems insane to me. Not to the rich, but to me anyway. A lot of problems could be solved in this country, in my opinion, if we started making stuff again. So the profit margin wouldn't be as high. So what? If we have any hope of surviving, we can't just have  the biggest military. We have to be able to support it from our own resources. If we are going to innovate and lead, we have to do the same thing. 

Of course, every American seems to think they're owed the Lifestyles of the Rich and Famous simply because they're Americans. We are living in an increasingly hedonistic society, in my opinion, seeking after the latest sensual pleasures. If it weren't for the massive deaths that would result, I could actually hope for a CME reset to show people what's really important in life. 

 
 
 
Nerm_L
Senior Principal
2.2  seeder  Nerm_L  replied to  Ronin2 @2    2 months ago
The problem isn't getting the chips built here; we can do that if we really wanted to. Right now it is cheaper to manufacture them overseas.

That's Milton Friedman BS pushed by politicians, financiers, and lawyers.  The lack of production in the United States has established artificial scarcity in the United States.

It is the rare earth minerals that are needed in the construct of the chips that is in short supply; and getting tighter. Until the US gets serious about securing the rare earth mineral resources needed; we are going to be at the mercy of China, Taiwan, and others. 

There is already a glut of gallium.  And the United States has known reserves of rare earth minerals.  The United States is already the second largest producer of rare earth elements, after China.  The United States may have unidentified reserves; we've killed off government functions that identified and mapped mineral reserves in the United States.  Rare earth minerals aren't that rare; the name is a misnomer.  The problem is that rare earth minerals are present in low concentrations that require a lot of concentrating and processing which requires technology.

What are the rare earth reserves of Taiwan?  Taiwan is being cited as the bottleneck in the supply chain.

 
 
 
Hallux
Sophomore Principal
3  Hallux    2 months ago

              Chip manufacturing is highly automated.

Building the infrastructure from mines to factories and trained labor is not.

 
 
 
Nerm_L
Senior Principal
3.1  seeder  Nerm_L  replied to  Hallux @3    2 months ago
Building the infrastructure from mines to factories and trained labor is not.

The United States already has the mining infrastructure; we're exporting the minerals.  The United States already has a lot of shuttered factory space with the services infrastructure in place.  And automated manufacturing doesn't need a workforce.

 
 
 
Kavika
Professor Principal
4  Kavika     2 months ago

China has the worlds largest reserves of rare earth materials at 44,000 mt followed by Vietnam at 22,000 mt than Brazil, Australia etc with the US coming in tied for 7th place with Greenland with 1,500 mt.

afganastan  is estimated to have more reserves of REM than China.

 
 
 
Nerm_L
Senior Principal
4.1  seeder  Nerm_L  replied to  Kavika @4    2 months ago
China has the worlds largest reserves of rare earth materials at 44,000 mt followed by Vietnam at 22,000 mt than Brazil, Australia etc with the US coming in tied for 7th place with Greenland with 1,500 mt.

And the United States is the second largest producer of rare earth elements; second to China.  But the United States is exporting those refined rare earth elements instead of supplying our non-existent manufacturing base.

Why can the United States make more money exporting raw materials than exporting manufactured goods?  

 
 
 
Drakkonis
Masters Guide
4.1.1  Drakkonis  replied to  Nerm_L @4.1    2 months ago

The usual answer has been the cost of labor, I believe. 

 
 
 
Kavika
Professor Principal
4.1.2  Kavika   replied to  Nerm_L @4.1    2 months ago

Cost of labor is the answer.

countries with large reserves of REM are not producing much at all. Vietnam with the second largest deposits of REM only mined 1,000 mt in 2020. China production actually increased by 8,000 mt.

 
 
 
Nerm_L
Senior Principal
4.1.3  seeder  Nerm_L  replied to  Drakkonis @4.1.1    2 months ago
The usual answer has been the cost of labor, I believe. 

What's the current average wage for robots?

Milton Friedman argued that technology was more economically efficient and cost effective because it reduces costs; primarily labor costs.  Technology dramatically increases economic productivity.  Those who adopt technology have a profit advantage.

Now that the technology is readily available, the United States can't deploy it?  We're being held economic hostages because robot wages are too high?

Maybe the United States has too many financially brilliant stupid people running things.

 
 
 
Nerm_L
Senior Principal
4.1.4  seeder  Nerm_L  replied to  Kavika @4.1.2    2 months ago
Cost of labor is the answer.

Then why is the United States the second largest producer of rare earth elements?  Mining is highly mechanized.  And machines don't collect wages.

The labor costs for transporting the minerals is likely higher than the labor cost of mining and refining the minerals.  There are far more middlemen involved in transportation, clearing customs, and accounting than in production.

 
 
 
Drakkonis
Masters Guide
4.1.5  Drakkonis  replied to  Nerm_L @4.1.3    2 months ago

I wasn't complaining about the cost of labor or advocating for robots. I think the cost of labor is only half the problem, in my opinion. The other half, and perhaps bigger half, is the idea of consumerism. We've got to have it all and it has to be the biggest and best. Our happiness has to come from stuff and for stuff we need as much money as we can get. 

What we should do is realize we don't need all this stuff. I had a co-worker trying to get a new pair of Nike shoes online the moment they were available. Thousands of people trying to get a stupid shoe and he didn't get it and was disappointed. A few minutes later they were on Ebay for two or three times what Nike was selling them for. That right there is part of the problem. 

What we need isn't 85" TV's, we need to produce our own steel. We don't need $80,000 Denali Trucks, we need to be producing our own medical equipment and supplies. The list can go on and on. The reason we are in the situation we're in is that the good of the United States and it's people isn't even a consideration anymore. The people with money want more of it and so all this country's resources and political efforts go into making that happen. We created China and now China wants to eat our lunch. And Wall Street just keeps on supporting it as long as they make money. 

This makes me sound anti-capitalist, but I'm not. Capitalism just needs to be redirected. Right now it's in the hands of those who care nothing for anyone but themselves. The reason there's a REM problem is that these people are making money the way things are right now. If new sources are found or existing sources expanded it won't happen because the nation needs these things, it will happen because doing so will make people with money more money. Any benefit to the nation will be incidental.  

 
 
 
Nerm_L
Senior Principal
4.1.6  seeder  Nerm_L  replied to  Drakkonis @4.1.5    2 months ago
I wasn't complaining about the cost of labor or advocating for robots. I think the cost of labor is only half the problem, in my opinion. The other half, and perhaps bigger half, is the idea of consumerism. We've got to have it all and it has to be the biggest and best. Our happiness has to come from stuff and for stuff we need as much money as we can get. 

I understand.  My point is that automation, particularly AI controlled automation, takes labor costs off the table.  The cost of labor is moot in the digital age.  The labor cost argument has become as obsolete as middle class manufacturing jobs.

As to consumerism, I agree to some extent.  But a growing proportion of consumption only provides survival.  It's one thing to not be able to afford the latest gizmo but it's quite another to not be able to afford medication or quality food or housing.  The United States is rapidly losing capacity to supply basic essentials at a price people can afford.

The article points out that electronic chips are essential; GM can't produce vehicles without them.  So, GM shutters manufacturing plants instead of investing in supplying its own essential needs.  The house is collapsing for want of a nail and we're not producing nails.  We just argue about the cost of saving the house and let the damned house fall down.  A pile of rubble doesn't have much value but we've saved a buck somehow.

 
 
 
Drakkonis
Masters Guide
4.1.7  Drakkonis  replied to  Nerm_L @4.1.6    2 months ago
So, GM shutters manufacturing plants instead of investing in supplying its own essential needs.  The house is collapsing for want of a nail and we're not producing nails.  We just argue about the cost of saving the house and let the damned house fall down.  A pile of rubble doesn't have much value but we've saved a buck somehow.

Kind of my point. We are focusing on the wrong stuff. Robots and AI have their place, but we shouldn't be maximizing their use at the expense of laborers. Even if every single task out there, whatever it may be, could be produced by machines and every person lived like a millionaire, it would be a disaster. Suicides would skyrocket. Everything is falling apart faster and faster because we're headed in the wrong direction. Most of it can be placed at the feet of the god, Profit.  

 
 
 
Ed-NavDoc
PhD Quiet
4.2  Ed-NavDoc  replied to  Kavika @4    2 months ago

Probably a pretty good indication on why the CCP is hot to be on good terms with the Taliban. China could have close to a lion's share of the world's REM supply.

 
 
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