Highlights
● The US congress was urged for funding to boost the production of semiconductors.
● In April, 27,000 jobs were lost in the motor vehicle and motor parts sector of the USA.
● Automakers in the US warn that the crisis of chips may last until the year 2022.
On Friday, the auto industry of the USA and the union of United Auto Workers urged Congress to pump billions of funds to boost the production of semiconductors. They said it is essential to fulfilling the needs of the automakers in the country who are forced to cut down the production due to a shortage of chips.
The Council of American Automotive, UAW, and Association of Motor & Equipment Manufacturers, in a joint statement on Friday, said, "Congress should go for prioritizing the production of semiconductors which are necessary for the assembling of vehicles here in the USA. It will help ensure that the manufacturers of motor vehicles have their fair share of the essential chips that are needed to fulfill the demands of consumers."
Tech companies and various other industries have urged repeatedly to the administration to not pick "losers and winners" or attach any kind of conditions for funding the production of chips.
The Labor Statistics Bureau has said that in April, 27,000 jobs were lost in the USA motor vehicles and vehicle parts sectors.
A letter seen by Reuters confirmed that the USA motor vehicles industry is estimated to have lost more than 330,000 unit production due to the shortage of chips.
Car Makers around the world curbed their output that resulted in hampering the pandemic recovery processes. This output curb resulted from a shortage of chips used from driver assistance systems to computer management of the engines.
The chip shortage on a global level has hit hard the automakers as many of them canceled the orders during the pandemic as the plants were idle. At the same time, demand for these chips boomed from the makers of consumer electronics due to churning out of various premium devices for the people who were spending time at their homes due to the pandemic.
Various automakers have pressed the government of the US to act, or the crisis of chip shortage may last until the end of 2022.
Last week Ford warned that the chip shortage might lead to slashing of production in second-quarter to half. It may also cost the company about 2.5 billion dollars in 2021, along with a production loss of about 1.1 million units.
The letter urged the US government for including the "specific funds for the facilities that produce the semiconductors and commit to dedicating a specific portion of their production capacity for the production of vehicle-grade semiconductor chips."
The National Manufacturers Association, heating and refrigeration institute, and Association of Home Appliances Manufacturers and Air-Conditioning on Friday urged the secretary of commerce Gina Raimondo for ensuring the supply of chips. They urged the secretary for a fair allocation of chips across all industry sectors.
These groups, in the statement, said, "They were dismayed with the commerce secretary Raimondo's comment of trying to prioritize the production of the chips for the automakers." They further added that all they ask from the government is fairness in the distribution of the chips so that other sectors like safety, health, production, and more can fulfill the demands of American consumers.
To this statement, the department or the commerce secretary did not comment immediately.
