U.S. auto industry group asked the government for help

According to the latest news, a U.S. auto industry group asked the government to help. It warned the global semiconductor shortage could sharply decline. Remarkably, it may result in 1.28 m fewer cars built this year and disrupt production for another six months.

According to the Alliance for Auto Innovation, the U.S. Commerce Department should apply a portion of funding in a proposed bill to extend U.S. semiconductor production to auto sector requirements.

President of the United States, Joe Biden, in February, ordered several Federal agency actions to cope with the chip crisis. Biden is also seeking $37 bn in funding for legislation to supercharge chip manufacturing in America.

According to John Bozzella, the group’s chief executive, some funding should go towards building new capacity to support the auto industry and mitigate the risks to the automotive supply chain evidenced by the current chip shortage.

The group claims that the U.S. government could specify a particular percentage allocation for facilities that will support auto-grade chips production in some manner.

The group contains almost all leading automakers with factories in the United States. These include General Motors Co, Volkswagen AG, Ford Motor Co, Toyota Motor Corp, and Hyundai Motor Co.

Automakers Suffering from the global chip shortage

Automakers have been significantly differing from the global chip shortage after many canceled orders when auto plants were closed throughout the COVID-19 pandemic.

When they were able to recommence production, the chipmakers were busy fulfilling orders for the consumer electronics industry. Significantly, demand for premium devices, both for work and leisure, boom as individuals spent more time at home.

Another essential thing to mention is that most automakers have been hit by the shortage. In recent announcements last week, Ford revealed that it would cut output at seven North American assembly plants. Meanwhile, Kia Motors announced it was cutting two days of production in Georgia.