GM restarts factories as chip shortage eases. This is good news for car inventory.

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GM said five factories would be operational again.

Jeff Kowalsky / Bloomberg

General Motors

is restarting some of its assembly plants as the global semiconductor shortage, which rocked the entire industry in 2021, begins to ease.

A

General Motors

(ticker: GM) said a spokesperson Barron’s that five factories come back online after downtime due to a lack of microchips. The Lansing Grand River plant will resume manufacturing Camaros and the CAMI plant in Canada will return. The other three facilities include the San Luis Potosi and Ramos Arizpe plants in Mexico and the Bupyeong plant in South Korea. Korean factory exports Chevrolet Trailblazer and Buick Encore GX to United States

Those factories weren’t indefinitely offline, but the Camaro facility, for example, is back up and running ahead of schedule. And putting the semiconductor problem in the rear view mirror is good for GM and the entire auto industry. Investors agree. General Motors shares rose 4% early in Thursday. the

S&P 500

and

Dow Jones industrial average,

for comparison, both were up less than 1%.

GM,

Ford engine

(F), and other automakers believe the chip shortage will drain billions of dollars in operating profits by 2021. The shortage was expected to be most severe in May, exacerbated by a supplier fire in Japan, and then s’ subside in the third trimester. It looks like what is happening.

“Our supply chain organization continues to make progress in working with our supply base to mitigate the short-term impacts of the semiconductor situation,” part of GM’s proposed statement read.

Even though chips have been a problem all year, the global economic recovery, which is boosting car sales, has been bigger business for the industry. Since the start of the year, GM stock is up about 45%, much better than comparable market returns.

Rising sales remain the most important factor for auto stocks, but it would be nice to have one less thing for investors to worry about.

Of course, the shortage is not over yet. Investors will still need to be careful and can expect more updates when companies release their second quarter results in July and August.

Write to editors@barrons.com


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