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Auto Industry Asks Commerce Department for Help With Chip Shortage

The global semiconductor shortage causing automakers all over the globe to idle assembly plants has prompted an industry group to ask the U.S. government for help.

The Alliance for Auto Innovation, which represents most automakers, including Ford, General Motors, Stellantis, Toyota, and Honda, proposes that the Commerce Department fund an expansion of U.S. microchip production.

Automakers depend on imported chips. Factors including high consumer electronics demand, an ongoing trade war with China, and shipping delays are behind the shortage of computer chips essential to auto production.

Automakers have been forced to idle assembly plants. Other makes have come up with temporary solutions such as partial assembly of vehicles and parking them until the necessary chips can be found. The many electronic features in automobiles rely on a vast network of connections controlled by the chips. Even one small part shortage can put the brakes on vehicle production.

Production stoppages are likely to result in limited dealer inventories as well.

That’s not to say that the federal government has ignored the shortage. Shortly after the inauguration, the Biden administration called for an inquiry into the shortage and proposed a $37 billion infusion into the chip manufacturing sector in the U.S. Find a used car for sale

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