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Semiconductor chip shortage leads to 160+ layoffs at GM Flint Engine Operations

Published: Feb. 22, 2021 at 5:00 PM EST
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FLINT, Mich. (WJRT) - More than 160 workers at the General Motors Flint Engine Operations plant are being laid off permanently beginning Monday.

The reason? An industry-wide shortage of semiconductor chips used in many new vehicles. In fact, many of General Motors’ highly profitable trucks and SUVs use around 150 of chips in each vehicle.

Flint Engine Operations builds a turbo engine for the Chevrolet Equinox assembled in Canada. UAW Region 1D Director Steve Dawes said GM wants to make sure its scarce semiconductor chips are going into the most profitable trucks and SUVs, such as the GMC and Chevrolet heavy duty pickup trucks made in the Flint manufacturing complex.

GM and the United Auto Workers union hope the semiconductor chip shortage is temporary, which potentially could allow the jobs to be reinstated someday. But the layoffs are classified as permanent, so the workers could be off the job for days, weeks or even months.

”If we do a temporary layoff, it has a start date and an end date. Then they can lay off by classification or department,” said Dawes. “When it comes to permanent layoff, which means there is no end date to the permanent layoff, they do what’s called a plant leveling.”

That’s exactly what’s happening at GM’s Flint engine plant right now with 160 to 170 workers being permanently laid off. With plant leveling, workers with the highest seniority will get to stay while those with lower seniority will be most likely to go.

But Dawes said the UAW will be working with GM to place those workers in other jobs -- possibly at other plants where there’s a greater need.

“It’s not a great opportunity or great situation for these people getting laid off, but it’s a great opportunity for us as a country to say, hey, maybe we ought to start building these things in the USA, because then we can control a lot more of this issue that we’re dealing with today,” he said.

Many automakers have idled production lines because of a shortage of microchips. These are the tiny silicon-based semiconductors that fuel our modern lives in cars, smartphones and laptops.

The average car has between 50 to 150 chips used to monitor important engine and safety systems and more. But when the coronavirus pandemic hammered auto sales last year, top chip makers shifted capacity from cars to other gadgets, resulting in a critical shortage being dubbed “Chipageddon.”

As the chip crunch disrupts production, experts fear it may delay a global recovery in the auto sector.

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