General Motors shares are at their lowest due to prolonged plant shutdowns

General Motors plants

General Motors shares fell 3.5% on Thursday after the company said temporary production stoppages at its plants in North America, Canada and Mexico would continue due to a chip shortage, leading to significant cuts in car production.

General Motors (GM) shares have lost their upward trend since late 2020/early 2021 amid reports of the US automaker's No.1 shift to electric cars. The company's shares have fallen 21.5% since the start of the summer due to semiconductor shortage problems and are now at their lowest price level in seven months.

At the beginning of August, General Motors reported strong financial results for the second quarter and raised its earnings growth forecast for the full year.

However, shares fell down 18% from the report to the close of trading on Thursday as the automaker confirmed that three of its pickup assembly plants in North America will be temporarily shut due to a chip shortage. Meanwhile, General Motors warned its investors that the problem will continue to affect the company's financial results both in the second half of this year and in 2022.

GM said on Thursday that temporary production stoppages at its plants in North America, Canada and Mexico will continue due to chip shortages, resulting in a significant reduction in car production.

Here's what investors need to know:

• Orion's assembly plant in Lake Orion will be shut down for at least a week.
• The Lansing Delta Township and Spring Hill plants have been out of operation since Monday, July 19, with production resuming the week of September 6.
• The Ramos Assembly plant will face two weeks of production downtime for the Chevrolet Blazer from August 23 to 30.
• GM's major plant in Canada, CAMI Assembly, will be idle for two additional weeks, with a planned opening date moved from Sept. 6 to Sept. 20.
• The General Motors plant in San Luis Potosi, Mexico was also scheduled to resume production the week of September 6, but will resume production on September 20.

All this will complicate GM's plans to ramp up production, which will affect financial results and investors' valuation of the stock.

The CFO, commenting on the second quarter report, admitted that had it not been for the chip shortage, GM's car deliveries could have been higher.