Peters, Stabenow seek federal action as auto plants idled by microchip shortage
U.S. Sens. Gary Peters and Debbie Stabenow on Friday joined 13 other senators from autos-producing states calling on the director of the National Economic Council to engage with countries and companies producing microchips that are in short supply and causing auto plants to idle.
The call came after U.S. and Taiwan government officials held a conference call about the chip crunch Thursday night. The global shortage of the semiconductors used to power automated and electronic features in vehicles is affecting the production of vehicles from F-150 pickup trucks to Chrysler minivans as well as consumer electronics.
Automakers say the disruption could cost them billions this year as experts predict the issue could persist for months just as the industry had been recovering from production and dealer shutdowns amid the COVID-19 pandemic last spring.
“This shortage threatens our post-pandemic economic recovery, the consequences of which stand to be especially acute in dominant auto manufacturing states like ours,” the Democratic senators from Michigan wrote with their colleagues from both sides of the isle in the letter to Brian Deese, the National Economic Council's director.
“We believe that the incoming administration can continue to play a helpful role in alleviating the worst impacts of the shortage on American workers, and we urge you to work with us to address the global semiconductor shortage.”
The senators also requested Deese support efforts to secure funding for the National Defense Authorization Act, which they said would boost the production of semiconductor manufacturing and incentivize its domestic production.
Chrysler and Dodge minivans are the latest vehicles to be affected by the shortage. Stellantis NV’s Windsor Assembly Plant will shut down for three weeks starting next week, according to a Facebook post from Local 444 of Canadian labor union Unifor, despite the transatlantic automaker indicating earlier this week it would continue production in North America through February.
"We are working closely with our global supply chain network to manage the manufacturing impact caused by the global microchip shortage and will continue to make production adjustments as necessary," Stellantis said in a statement Friday.
The stoppage joins disruptions at General Motors Co. plants in Kansas, Mexico and Canada as well as at Ford Motor Co.’s F-150 truck plants in Dearborn and Kentucky.
Ford executives on Thursday said while sharing quarterly financial results that the shortage of the semiconductors could result in a production loss of up to 20% in the first quarter and cost up to $2.5 billion in adjusted pre-tax earnings for the first half of 2021. Its SUV plants in Chicago and Kentucky have been affected by the shortage, too, in recent weeks.
Stellantis’ Windsor plant produces the Chrysler Pacifica, Chrysler Voyager and Dodge Grand Caravan minivans. It employs 4,464 hourly and 207 salaried workers on two shifts.
Last month, Stellantis said it had delayed the restart of its Jeep Compass plant in Mexico and scheduled downtime at its Brampton plant in Canada producing Dodge muscle cars and Chrysler sedans to keep production going at other North American plants.
Meanwhile in Europe, Stellantis has slowed the production of its Melfi plant in Italy where it produces the Jeep Renegade and Fiat 500X crossovers for the U.S. and Europe as well as the Jeep Compass for Europe, the automaker confirmed based on an initial report by Reuters. The adjustment affects 7,000 workers.
Decisions are being made daily and plant by plant based on market trends and other parts supply, a Stellantis spokeswoman in Europe said in a statement.
GM also said it will operate a South Korea plant at half-capacity next week.
Detroit's automakers are not alone in feeling the chip crunch. The shortage has caused production disruptions for automakers around the world, including Toyota Motor Corp., Nissan Motor Corp., Daimler AG and Volkswagen AG.