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General Motors is the latest automaker to temporarily shut plants because of the shortage of semiconductor chips that has been causing problems across the auto industry. The three plants will shutter for a week starting Feb.8. Automakers cut back computer chip orders early last year when the pandemic caused temporary plant closures and slammed the brakes on auto sales and production. So electronics manufacturers, who had strong sales during the pandemic, happily snapped up the excess chip supply. But when car sales bounced back sooner than expected, it left the industry struggling with a chip shortage. « Despite our mitigation efforts, the semiconductor shortage will impact GM production in 2021, » GM said Wednesday. « We are currently assessing the overall impact, but our focus is to keep producing our most in-demand products – including full-size trucks and SUVs and Corvettes. » The three plants to be idled are the Fairfax plant in Kansas City, Kansas; the CAMI plant in Ingersoll, Ontario; and the San Luis Potosi plant in Mexico. Additionally, the Bupyeong 2 assembly plant in South Korea will operate at half of normal production next week. The North American plants being idled all make SUVs, but only smaller models — not the full-size SUVs that GM wants to keep building. The Fairfax plant also makes the Malibu sedan. The ADP employment report beat expectations this morning with 174,000 jobs added in January, injecting some optimism into the forecasts for Friday’s government jobs report. But the better-than-expected data should be taken with a grain of salt, said Nela Richardson, chief economist at the ADP Research Institute. Last month, the government’s jobs report recorded a loss of 140,000 jobs, driven by losses in the hospitality and leisure industry. So while an uptick in the jobs numbers is a good sign, « this is not close to where we need to be to see a quick rebound in the jobs market, » she said. While lower income jobs are bearing the brunt of the jobs crisis, higher income earners haven’t seen job losses to the same extent, and that is taking its toll on wages. On average salaries are rising, but not because people are generally making more money, but because lower income earners are not working, Richardson said. Trends like that highlight how far the nation is from a recovered jobs market. The GameStop (GME) frenzy is moving into the next phase, and that phase could be regulation. Treasury Secretary Janet Yellen will hold a meeting to look into the GameStop phenomenon, but Allianz chief economic adviser Mohamed El-Erian told Alison Kosik on the CNN Business digital live show Markets Now.
