State governors urge Biden to address global chip shortage

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A bipartisan group of eight governors from US auto-making states urged President Joe Biden to do more to press semiconductor firms to work on the global automotive chip shortage, which has led to declining vehicle production numbers.

On Friday, the governors of Kansas, Michigan, Ohio, Indiana, South Carolina, Missouri, Kentucky, and Alabama, asked Biden in a letter, to join other governments in urging semiconductor makers and wafer companies to expand production and even relocate significant resources from their current production to auto-grade wafer production.

The effort was led by Democrat Michigan Governor, Gretchen Whitmer, who urged Biden to do everything in his power to protect auto-jobs at risk.

Joe to the rescue

The White House did not comment immediately. However, auto executives met on Wednesday with White House officials and talked about the issue.

The Lawmakers have also urged the White House to pressure chip makers to boost auto chip production levels.

Biden said on Wednesday that he would seek $37 billion in funding for legislation, to boost US chip manufacturing and signed an executive order aimed at the global semiconductor chip problem.

Losses and halted production

Some of the largest auto manufacturers have been particularly hard-hit by the shortage. They include General Motors, Ford, Volkswagen, Toyota, Nissan, Subaru, and Stellantis.

Ford said that because it lacked chips, production could be cut by up to 20% in the first quarter, lowering the company’s earnings from $2.5 billion to $1 billion.

GM said that the shortage will cut up to $2 billion of its profit from 2021, since it has been forced to halt output at plants in the US, Canada, Mexico, and Brazil. The shortage could affect nearly 1 million units of global light vehicle production in the first quarter alone, according to the data firm HIS Markit.