Congress urged to help auto sector’s chip needs

WASHINGTON — The U.S. auto industry and United Auto Workers union on Friday urged Congress to tie billions of dollars in government funding to boost semiconductor production to help fill the needs of automakers forced to slash production because of chip shortages.

Congress “should prioritize production of the semiconductors necessary to assemble vehicles here in the United States. This will ensure that motor vehicle manufacturers have a fair share of chips needed to meet consumer demand,” said the American Automotive Policy Council, Motor and Equipment Manufacturers Association and UAW on Friday in a joint statement.

Tech companies and other industries have repeatedly urged the administration not to pick “winners and losers” or attach conditions to funding to address the chip shortage.

The Bureau of Labor Statistics said the U.S. motor vehicle and parts sector lost 27,000 jobs in April.

The letter seen by Reuters said the U.S motor vehicle industry is estimated to have lost over 330,000 production units as a result of the chip shortage.

Carmakers across the world curbed output, hampering attempts to recover from the pandemic, due to a shortage of chips used in everything from computer management of engines to driver assistance systems.

The global chip shortage hit automakers hard after many canceled orders when plants were idled during the coronavirus pandemic.

At the same time, demand for chips boomed from consumer electronics makers churning out premium devices for people spending more time at home.