Autos & Transportation

U.S. Commerce chief makes pitch for chips funding in Michigan

3 minute read

U.S. Commerce Secretary Gina Raimondo listens to a question during an interview with Reuters at the Department of Commerce in Washington U.S., September 23, 2021. REUTERS/Kevin Lamarque/File Photo

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TAYLOR, Michigan, Nov 29 (Reuters) - U.S. Commerce Secretary Gina Raimondo on Monday made a pitch for Congress to approve $52 billion to expand U.S. semiconductor manufacturing in a visit to Michigan where she heard about auto sector struggles with the ongoing chip supply crisis.

"The reality is Michigan will lose jobs ... if we don't increase our supply of chips," Raimondo said.

She visited a United Auto Workers local hall near Detroit and met with Michigan politicians, and officials from General Motors Co (GM.N), Ford Motor (F.N) and Chrysler-parent Stellantis on the push for funding before the end of December.

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Detroit's Big Three automakers and other global automakers have been forced to cut production and even make some vehicles without features like heated seats or digital speedometers because of the semiconductor shortage.

On Nov. 17, House of Representatives and Senate leaders said they would negotiate seeking final agreement on a bill to boost U.S. technology competitiveness with China and semiconductor manufacturing. The Senate-approved legislation would award $52 billion for semiconductor manufacturing and authorize $190 billion to strengthen U.S. technology and research.

Stellantis executive Marlo Vitous said the company is working hard to get chips to make vehicles. "It is pure grit right now -- the fight for the parts that we need."

UAW President Ray Curry said the chips shortage "at its core ... is not to off-shore American jobs. Bring those" semiconductor jobs back to the United States.

Automotive chips demand will continue to rise as automakers shift to electric vehicles, which use twice as many chips as gasoline-powered models. The companies say the crisis will at least another year.

Michigan lawmakers cast the issue in geopolitical terms.

"We are not going to let China kick our ass. We are going to kick China's ass," Representative Debbie Dingell said at the forum, saying it was crucial for U.S. workers that Congress boost funding for chips.

The Chinese Embassy in Washington did not immediately respond to a request for comment.

"We need the House to pass its version of the CHIPS Act," Raimondo said at a separate Detroit Economic Club appearance.

"Commerce is pursuing strategies like 'nearshoring' and 'friendshoring,' so like-minded partners are integrated into our supply chains," Raimondo added. "As we rebuild our supply chains, we can’t be dependent on foreign countries that don’t share our values for our critical chip components."

Last week, Samsung Electronics (005930.KS) said it had picked Taylor, Texas, as the location for a new $17 billion plant to make advanced chips.[nL4N2SE06N]

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Reporting by David Shepardson; Editing by Lincoln Feast and Leslie Adler

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