General Motors is looking at partnerships to secure long-term supply contracts and chips

General Motors is looking at partnerships to secure long-term supply contracts and chips

General Motors Co. is considering signing long-term supply contracts or partnering with chip and oil suppliers to mitigate the impact of future semiconductor shortages, the automotive finance chief said on Wednesday.

“Whether we’re looking to make longer-term commitments or collaborate with people at the foundry, we’re looking at all aspects of the supply chain when it comes to chips so that something like this doesn’t happen again,” Paul Jacobson said at a Deutsche Bank conference.

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The global chip shortage has forced GM and other manufacturers to shut down factories, but the Detroit-based company has been able to largely protect the output of the most lucrative models. GM said the shortfall could anticipate between $ 1,500 and $ 2 billion for this year’s profit, but it was recently launched in some factories that were idle.

The shortfall this year will cost automakers $ 110 billion in lost revenue this year, and will reduce production by 3.9 million vehicles, consulting firm AlixPartners said.

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This prompted motorists to rethink how their supply chain works in terms of critical parts like chips.

The German Volkswagen AG has said it is talking to chip makers about securing supplies in the long term, and an unnamed executive has previously told Reuters it buys more from manufacturers than working directly with others.

Jim Farley, CEO of Ford Motor Co, received the No. 1 pick last month. 2 The U.S. automotive parts are being redesigned to use more affordable chips and grow other strategies, such as building a chip supply buffer or working directly with foundries that make ovens used in semiconductors.

This story has been published without text changes from a wireless agency feed.

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