Stabenow and Peters urge Dem leaders to pass semiconductor manufacturing funding

By: - December 6, 2021 3:47 pm

Signage at the Ford Motor Co. Rouge Electric Vehicle Center in Dearborn touts the electric F-150 Lightning pickup truck, which will be produced at the factory. (Andrew Roth | Michigan Advance)

U.S. Sens. Debbie Stabenow (D-Lansing) and Gary Peters (D-Bloomfield Twp.) wrote a letter Thursday to Democratic congressional leaders urging them to keep provisions supporting semiconductor manufacturing in the United States Innovation and Competition Act (USICA) and to pass the bill through the U.S. House. 

The continuous shortage has plagued the U.S automotive industry throughout 2021, which is of particular concern to Michigan as the home of the Detroit Three automakers. Semiconductors are essential to the production of vehicles — especially electric vehicles. Monitors and sensors throughout cars require semiconductors for the vehicle to operate properly. 

U.S. Sens. Debbie Stabenow and Gary Peters at the NAACP dinner | Andrew Roth

The provisions within the USICA aiming to boost semiconductor manufacturing stem from the CHIPS Act, which Stabenow and Peters introduced and passed earlier in the year. The CHIPS Act would allocate $52 billion to boost semiconductor manufacturing here in the U.S. About $2 billion of the funds would also go to semiconductor manufacturing specifically for the automotive industry. 

Peters said in a statement to the Advance prior to the letter to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.) that “we must pass” both the Build Back Better Act and the CHIPS Act to ensure that the auto industry will avoid further losses. 

“The semiconductor chip shortage has hurt our economy and cost jobs – and highlights why we must shore up our supply chains and support domestic manufacturing,” Peters said. “Together, this legislation will provide long-term stability to the auto industry and invest in the production of electric vehicles while leveling the playing field for Michigan workers.”

Automotive companies across the world are on pace to lose 7.7 million vehicles in production due to the global semiconductor chip shortage. The massive loss for automotive companies will translate into about $210 billion in lost revenue. 

For Michigan-based automakers, Ford will have about 65,000 vehicles lost and General Motors will have an estimated 116,000 lost vehicles unable to be recovered. Stellantis has projected it will lose 98,000 vehicles. Ford and GM have tried to take aim at the crisis by partnering with various domestic and international suppliers and researchers to boost their individual company’s supply. 

GM spokesperson David Barnas said In a statement to the Advance that the company is projecting to see “higher volumes in 2022 compared to 2021” and said the company is starting to see more semiconductors come in. He did not comment on the pending legislation. 

“We are currently seeing a better flow of semiconductors in our supply chain, our North American assembly plants are now back to running regular production, and volumes are increasing in the fourth quarter,” Barnas said. “Although the situation remains complex and fluid, we remain confident in our team’s ability to continue finding creative solutions to minimize the impact of the semiconductor shortages that have been impacting the industry.”

General Motors headquarters, Detroit | Susan J. Demas

The senators’ letter also comes after U.S. Commerce Secretary Gina Raimondo spoke at the Detroit Economic Club last week to urge the U.S. House to pass the CHIPS Act. She spoke alongside Peters, Stabenow, UAW leadership and other members of Michigan’s congressional delegation. 

The Biden administration has made it a strong point that they would like to see half of U.S. auto sales to be for electric vehicles by 2030. Biden also visited General Motors new electric vehicle assembly plant in Detroit in November to promote electric vehicle production and the Build Back Better Act. 

Raimando pinpointed that each electric vehicle requires an estimated 2,000 chips, which is about double the amount needed for a normal car. 

However, Raimando said we are wasting “precious time every day that the CHIPS Act isn’t passed and appropriated in Congress,” and that the U.S. must catch up to other countries when it comes to semiconductor chip manufacturing in order to be a leader in the production of electric vehicles. She said passing legislation like the CHIPS Act will help boost production and the nation’s ability to be a leader in semiconductor manufacturing. 

“The truth is every single day we wait for the full passage and implementation of this bill is a day we can’t afford to fall further behind,” Raimondo said. “And by the way, other countries aren’t waiting. Other countries are moving forward with large investments.”

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Julia Forrest
Julia Forrest

Julia Forrest is a contributor to the Michigan Advance. She has been covering Michigan and national politics for two years at the Michigan Daily and OpenSecrets. She studies public policy at the University of Michigan.