Revving up U.S. automotive supply chains

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Technology has become increasingly intertwined with the auto industry, as the recent semiconductor shortage has brought to light. The Detroit Three have had to halt production on numerous models for lack of chips. So a bipartisan coalition in Congress is trying to boost U.S. supply chains.

The lawmakers are right to do so, given competition from China as well as federal pressures on the automakers to move to electric vehicles.

The semiconductor chips are integral to the manufacturing of modern vehicles, from power steering to engine-management systems. COVID-19 has disrupted global supply chains.

One analysis from AlixPartners estimates that global auto production is already down 1.4 million vehicles due to the chip shortage. The auto industry stands to lose $61 billion this year as a result.

President Joe Biden acknowledged some of the challenges facing the automakers, and the importance of ensuring they have the supply chains they need to continue production, although his administration has said he’s not likely to offer automakers any special treatment.

The Detroit News reported that a group of 23 senators and 42 House members — Republicans and Democrats — sent Biden a letter Monday, iterating their support for the CHIPS for America Act that would put in place manufacturing and research incentives for the semiconductor industry. Congress has already authorized the spending, but it’s not yet been appropriated.

Biden and Congress can work together to secure this bipartisan funding to help prevent future disruptions to the automotive supply chains that are vital to the U.S. economy.

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