Shortage of chips slowing auto production in U.S.

Robert Besser
02 Mar 2021, 02:16 GMT+10

A group of eight governors from U.S. auto states wrote to President Joe Biden asking him to place pressure on semiconductor firms due to the global shortage of automotive chips.
The governors urged Biden to join foreign governments in encouraging semiconductor and wafer companies to intensify production.
Although there was no immediate comment, White House officials met with auto executives on Wednesday.

WASHINGTON DC: A group of eight bipartisan governors from U.S. auto states has written to U.S. President Joe Biden asking him to place pressure on semiconductor firms, due to the global shortage of automotive chips that has cut vehicle production and auto jobs.

The group, led by Michigan Governor Gretchen Whitmer, a Democrat, and comprising the governors of Michigan, Indiana, Ohio, Kentucky, Kansas, South Carolina, Alabama and Missouri, urged Biden to join foreign governments in encouraging semiconductor and wafer companies to intensify production and "temporarily reallocate a modest portion of their current production to auto-grade wafer production."

Although there was no immediate comment from the White House, officials met auto executives on Wednesday to discuss the semiconductor issue. On the same day, Biden signed an executive order aimed at addressing the global semiconductor chip shortage and revealed plans to seek $37 billion for legislation to boost U.S. chip manufacturing.

Automakers hit by the shortage include General Motors, Ford, Volkswagen, Toyota, Nissan, Stellantis, Tesla and Subaru.

While Ford said a lack of chips could see the company's adjusted earnings drop by $1 billion to $2.5 billion, GM admitted that the shortage could erase up to $2 billion from its 2021 profits.

According to data firm HIS Markit, the shortage of auto semiconductor chips could impact some 1 million units of global light vehicle production in the first quarter of 2021.