Prolonged layoffs at Kansas GM, Ford plants fueled by parts shortage
It isn't clear when the shutdown at General Motors' Kansas City plant will end
Prolonged layoffs have hit Kansas car manufacturing plants due to the ongoing global semiconductor shortage that has hampered automobile production.
For instance, workers at General Motors' Fairfax Assembly & Stamping Plant in Kansas City have been temporarily laid off since early February while production is stalled, General Motors spokesperson Daniel Flores told FOX Business.
"This is a fluid situation, so we’ll continue to monitor the situation on a daily basis," Flores said.
Just this week, Ford also closed its Transit van line at the Claycomo Assembly Plant, also located in Kansas City, according to The Kansas City Star.
Ford told FOX Business that a fire at a chip supplier facility in Japan and severe winter storms in Texas are driving additional production changes at Ford.
The chip shortage has caused the truck and transit lines at Ford's U.S. assembly plants in Chicago and Flat Rock, Michigan – in addition to its Kansas City location – to halt for the weeks of April 19 and April 26, a Ford spokesperson said.
A Ford logo on display at the Pittsburgh Auto Show. (AP Photo/Gene J. Puskar, File)
Its Kentucky Truck Plant will also be down for two weeks starting April 26 and its Ohio plant will produce only Super Duty Chassis Cabs and Medium Duty trucks.
However, Ford hourly employees in the U.S. with more than one year of seniority will still receive 75% of their gross pay even when plants are temporarily down, according to the automaker.
"Our teams continue prioritizing key vehicle lines for production, making the most of our available semiconductor allocation, and have been using a number of unique solutions around the world so we can provide as many high-demand vehicles to our customers as dealers as possible," a Ford spokesperson said in an emailed statement.
Workers at GM's Kansas plant, which manufactures the Cadillac XT4 and Chevrolet Malibu, are represented by UAW Local 31.
It isn't clear when the shutdown at General Motors' Kansas City plant will end. However, the company is slated to restart production at its Spring Hill, Tennessee, plant by April 19 and will no longer be forced to cancel its Chevrolet Blazer production at a Mexico plant later this month, according to The Detroit News.
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"Following our announcement last Thursday, April 8, GM’s supply chain organization has made strides working with our supply base to mitigate the near-term impacts of the semiconductor situation on both Spring Hill Assembly and Ramos Assembly," General Motors spokesperson David Barnas told The Detroit News.
On Monday, President Biden held a virtual meeting with corporate leaders about the global shortage of semiconductors that continues to plague a wide array of industries, including the automotive sector.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GM | GENERAL MOTORS CO. | 48.15 | -0.30 | -0.62% |
| F | FORD MOTOR CO. | 10.59 | -0.18 | -1.67% |
Industry officials say semiconductor companies diverted production to consumer electronics during the worst of the COVID-19 slowdown in auto sales last spring. Global automakers were forced to close plants to prevent the spread of the virus. When automakers recovered, there weren’t enough chips available as the demand for personal electronics boomed.
In March, Nissan said it was temporarily shutting down production at factories in Smyrna, Tennessee; Canton, Mississippi; and in Aguascalientes, Mexico, due to the chip shortage.
Volkswagen and Stellantis (formerly Fiat Chrysler) also said they have been affected by the shortage and forced to delay production of some models in order to keep other factories running.
Representatives for UAW Local 31 and Ford did not immediately respond to FOX Business' request for comment.
The Associated Press contributed to this report.
This story has been updated to include comment from Ford