General Motors said it will build certain 2021 light-duty full-size pickups without a fuel management module starting Monday until the end of the model year in late summer.
The goal is to keep pickups rolling off the assembly line despite a global shortage of semiconductor chips used in the modules. But the result is those affected pickups will not achieve top fuel economy performance.
“Due to the global shortage of semiconductors impacting the global auto industry, we are making Active Fuel Management/Dynamic Fuel Management unavailable on certain 2021 model year full-size trucks,” said Michelle Malcho, GM spokesperson, on Monday.
Lose one mile per gallon
That means 2021 light-duty Chevrolet Silverado and GMC Sierra pickups equipped with the 5.3-liter EcoTec3 V8 engine with both six-speed and eight-speed automatic transmissions will have lower fuel economy by one mile per gallon, Malcho said.
“By taking this measure, we are better able to meet the strong customer and dealer demand for our full-size trucks as the industry continues to rebound and strengthen,” Malcho said.
GM builds its light-duty pickups at Fort Wayne Assembly in Indiana and Silao Assembly in Mexico.
GM builds its heavy-duty Silverado and Sierra pickups at Flint Assembly, where the chip shortage has not had an impact.
“We have not had a single part outage on anything,” said Eric Welter, shop chairman of UAW Local 598 representing hourly workers at Flint Assembly. “We’re running three shifts, six days a week and we’re hitting our production target every day.”
Malcho declined to say how many pickups will be affected by the absence of the module, but she said it will not have a substantial impact on GM’s U.S. corporate average fuel economy (CAFE) numbers.
“We routinely monitor our fleet for compliance in the U.S. and Canada, and we balance our portfolio in a way that enables us to manage unforeseeable circumstances like this without compromising our overall greenhouse gas and fuel economy compliance,” Malcho said. “This is a temporary change and we look forward to making” the fuel-saving technology available as soon as possible.
GM has been producing its full-size pickups without interruption despite a shortage of the semiconductor chips since last year. The deficit is caused in part by the coronavirus pandemic, which led to increased demand for laptop computers and other personal electronics that use the chips.
Cars also use them in a variety of parts and infotainment systems. In fact, one car part could use 500 to 1,500 chips depending on the complexity of the part, analysts said.
According to Cox Automotive data, GM has a 31- to 47-day supply of the Silverado depending on the model. For the Sierra, GM has a 32- to- 36 day supply. For February, the industry average day supply was 77.
Malcho said GM is still building all of its pickups, which is a point CEO Mary Barra emphasized during the fourth-quarter earnings call with analysts. Pickups and full-sized SUVs are GM’s most profitable vehicles.
Barra said GM would try to protect pickups and full-size SUVs from any impact from the chip shortage. But the shortage could cost GM up to $2 billion in lost earnings this year. Barra said GM expected chip supplies to return to normal in the second half of the year.
GM’s idled plants
GM presently has two of its assembly plants shuttered until at least mid-April, another until the end of March and will idle a fourth, all due to the chips shortage.
GM on Feb. 8 shut down production for both shifts — initially until mid-March — at the following plants:
- Fairfax Assembly and Stamping Plant in Kansas City, Kansas: About 2,000 hourly workers build the Chevrolet Malibu sedan and Cadillac XT4 SUV.
- CAMI, Ingersoll, Ontario, Canada: About 1,500 hourly workers build the Chevrolet Equinox SUV.
- San Luis Potosí, Mexico: Builds Chevrolet Equinox and Trax and GMC Terrain SUVs.
GM said production at Fairfax and CAMI will now be shuttered until mid-April. GM is extending downtime at San Luis Potosi through the end of March.
Additionally, GM’s Gravatai plant in Brazil will take downtime in April and May. The Gravatai factory, in Rio Grande do Sul, Brazil, builds the Chevrolet Onix, which is a top-selling car in South America.