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GM builds pickups without certain modules due to global chip shortage, hurting fuel economy By Reuters

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© Reuters. FILE PHOTO: General Motors assembly workers connect a battery pack underneath a partially assembled Chevrolet Bolt EV vehicle

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By Ben Klayman

DETROIT (Reuters) – General Motors Co (NYSE:) said on Monday that due to the global semiconductor chip shortage the U.S. automaker is building certain 2021 light-duty full-size pickup trucks without a fuel management module, hurting those vehicles’ fuel economy performance.

The lack of the active fuel management/dynamic fuel management module means affected models, equipped with the 5.3-liter EcoTec3 V8 engine with both six-speed and eight-speed automatic transmission, will have lower fuel economy by one mile per gallon, spokeswoman Michelle Malcho said.

Malcho emphasized all trucks are still being built, something GM has repeatedly stressed it would try to protect as pickups are among GM’s most profitable models. She declined to say the volume of vehicles affected.

“By taking this measure, we are better able to meet the strong customer and dealer demand for our full-size trucks as the industry continues to rebound and strengthen,” Malcho wrote in an email.

The change runs through the 2021 model year, which typically ends in late summer or early fall, she said.

Malcho said it would not have a major impact on the Detroit automaker’s U.S. corporate average fuel economy (CAFE) numbers.

“We routinely monitor our fleet for compliance in the U.S. and Canada, and we balance our portfolio in a way that enables us to manage unforeseeable circumstances like this without compromising our overall (greenhouse gas) and fuel economy compliance,” she said.

GM’s fleetwide fuel economy in the 2018 model year was 22.5 miles per gallon and was projected to rise to 22.8 mpg for 2019, according to a report by the Environmental Protection Agency.

To meet federal CAFE requirements, automakers like GM often use credits from either earlier years where they faced less stringent rules and performed better than the requirements or buy credits from other automakers.

GM said last month the chip shortage could shave up to $2 billion from this year’s earnings. It subsequently said it expected global chip supplies to return to normal rates by the second half of the year.

The shortage, which has hit automakers globally, stems from a confluence of factors as carmakers, which shut plants for two months during the COVID-19 pandemic last year, compete with the sprawling consumer electronics industry for chip supplies.

GM shares were down 1.7% in morning trading.

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