General Motors Co is considering signing longer-term supply contracts in the future or partnering with chip and wafer suppliers to mitigate the impact of global semiconductor shortages, the automaker’s chief financial officer said on Wednesday.
“Whether we’re working with foundries to make longer term commitments or we’re trying to work with people, we look at every aspect of the supply chain to really make sure something of this magnitude doesn’t happen again to chips. “, Said Paul Jacobson at a conference of the Deutsche Bank.
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The global chip shortage has forced GM and other automakers to shut down plants, but the Detroit-based company has largely managed to protect production of its top-performing models. GM has said the shortage could reduce this year’s profits by $ 1.5 billion to $ 2 billion, but has recently resumed production at some shut down plants.
The shortage will cost global automakers $ 110 billion in lost sales this year and cut production by 3.9 million vehicles, consulting firm AlixPartners said.
That had led automakers to rethink how their supply chain works for critical parts like chips.
Germany’s Volkswagen AG said it was speaking to chipmakers about securing supplies over the long term, and an unnamed manager previously told Reuters the automaker is considering buying directly from manufacturers rather than working through others.
Jim Farley, chief executive of Ford Motor Co, said last month that the No. 2 US automaker is redesigning parts to use more accessible chips and consider other strategies, including building a buffer supply of chips or working directly with them Foundries that make the wafers used in semiconductors.
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