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Computer chip shortage forces GM to pause production again

A broad spectrum of consumer products is also feeling the chip pinch

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Photo (c) Tramino - Getty Images
The chip shortage that’s run roughshod on automakers took a nasty turn on Thursday when General Motors (GM) said it would dramatically cut its North American vehicle production because of the situation.

This marks the second time that GM has halted production because of the chip shortage in the last two months.

Who knows how the chip shortage will play out long-term for the automaker, but it’s either extending or adding downtimes at eight plants in the U.S., Canada, and Mexico to cut its immediate losses. To start, much of the production trimming is reported to last for two weeks. Sedans are apparently getting a reprieve, but GM’s full-size and midsize pickup trucks like the Chevrolet Blazer, GMC Terrain, and Chevrolet Trailblazer will be unaffected.

“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,” the company said in a statement Thursday.

Although the industry hoped it would only be a short-term issue, the chip shortage has spiraled out of control. Some industry analysts have said it’s possible that the problem could last as long as late 2022.

The long-tail effect of the chip shortage

Not only has the chip shortage impacted automotive consumers, but it has also affected the production of electronic devices and home appliances.

Appliance sales have soared during the pandemic, especially after people got their CARES checks. One electronics company -- LG -- even went so far as ditching its smartphone division so that it could concentrate on the home appliance market.

If you’ve waited until now to think about new kitchen appliances, you may want to pack a picnic basket because it’s going to be a while. 

“If you’ve been trying to get a home renovation project started, you may be waiting for your new range, fridge, or dishwasher,” said Francoise von Trapp of 3DIncites. “I was one of the lucky ones! I renovated my kitchen in February, and everything was in stock. But that’s not the case for everyone. If you can get your hands on the latest appliances, chances are they will cost more than they did two years ago.”

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