GM CEO Mary Barra and other auto industry executives sent a letter to Congress this week urging it to pass $52 billion in federal funding for domestic semiconductor manufacturing efforts.
In addition to Barra, the letter was signed by the CEOs of fellow Detroit Big Three automakers Ford and Stellantis, as well as the U.S. leaders of foreign automakers like Volkswagen, Toyota, Hyundai, and Mercedes-Benz, BMW and Nissan.
The US Senate passed a bill last year that would funnel $52 billion into domestic semiconductor manufacturing efforts, which was part of a broader $250 billion package called the US Innovation and Competition Act. The bill, which would include $2 billion to support production of automotive-grade semiconductor chips, is still awaiting approval from Congress at this time.
“If the U.S. is to remain a leader in automotive innovation, we must make the strategic, forward-looking investments today necessary to enhance the capacity and resilience of our domestic and regional semiconductor supply chains,” said the letter, which was viewed by news agency Reuters.
The letter also said “the auto industry is facing substantial production losses stemming from capacity challenges across the global semiconductor supply chain” as quoted by Reuters, adding that “numerous automakers have been forced to halt production and cancel shifts in the United States, with serious consequences for their workers and the communities in which they operate.”
A shortage of semiconductor chips has forced GM and other automakers to reduce production output in North America and abroad, leading to low inventory levels at dealerships and increased prices for consumers. Experts predict the chip shortage will persist for the foreseeable future, as chip plants take years to set up and adequately scale production, making it difficult to quickly increase supply.
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Comments
They outsourced it, they can use their own money to bring it back. Congress never bails me out when I make a poor financial decision.
True. But the Senate bailed me out once.
Crap. That’s probably fraud I shouldn’t be talking about.
In public.
GM didn’t outsource it. GM always bought chips from semiconductor companies, largely Motorola. Motorola, which part became Freescale, which got bought by NXP, failed at making their own chips, so they shut down the plants and outsourced it to Taiwan and South Korea.
Just like AMD and IBM did, and how Apple, Qualcomm, Broadcom, NVIDIA operated from day 1. The only major company that designs then builds their own computer chips left in the world is Intel, and they’re hurting.
Not true. They have a old ECU plant in Indiana right now that’s being used as a warehouse. They were still making computers there I want to say up until 2006. Then they outsourced it. They can bring it back online as far as I’m concerned. And while their at it, the can simplify these computers so you don’t have to go to the dealership every time to clear the check engine light. Let simpler cheaper computers be thier incentive to not gouge on repairs.
Wrong. That plant made power semiconductors after the 80’s. Power semiconductors, used for switching motors, are big and slow, and require a different, simpler plant than CPU/computer chips. There’s a still number of power IC fabs in the US.
In the 80’s, it was common for semiconductor manufacturers to “second source”. That is, even though they made chips at their own plants, they’d license others to make the chips for them by providing mask sets and technical details. For example, AMD got their start second-sourcing Intel CPUs. Kokomo second-sourced Motorola chips. That basically set off today’s situation where all chips are outsourced to a dedicated foundry. When that happened, GM/Delco lost the ability to make chips there.
Waiting on my 2022 Tahoe LT from Arlington, Tx plant. I’ve been waiting for my car since Christmas Eve, 6 months. BKQG35
Tell them to go hump themselves. They got themselves into this pickle to begin with.
The did close down the chip plant in Indiana, quoting it was cheaper to buy from overseas than bring it up to date. They can reinvest those savings to bring it back online.
If AMD and IBM failed at making chips and quit, and Intel is failing hard, what makes you think a completely non-tech company like GM has a chance at making chips?
Kokomo was closed decades ago. Decades. I always get a laugh out of comments on chips by outsides. It is a very very very very capital intensive biz. In 3 – 5 years wait and watch as the glut of parts bankrupts half of new players. Micron is already predicting a glut and memory prices have started to fall indicating that. From Barrons. “Demand issues and possible capital expenditure cuts come on the heels of an inventory glut.” Micron stock has been falling as a result.
Hey Mary. Why don’t you call that greedy skinny pig that is Timmy Crook and ask him to not only move his silicon biz to America but turn it into an ‘IBM’ (separate company) that only makes chips?
Hilarious that you look up to IBM. IBM lost their shirt so hard making chips, they PAID the government of Abu Dhabi $1.5 billion to take the operation off their hands.
I meant to say Intel.
LOL Intel. They’re hurting bad because they haven’t been able to advance their chip tech since 2014. They’re stuck making 14 nm chips, everybody else is on 5 nm and will be on 3 nm by next year. Due to this mess, they’re outsourcing chips to TSMC, like everybody else does.
If Intel fails at making modern chips, what makes you think GM can?
Try again.
IBM has been shrinking for since 1990. Try again with a company that is actually successful. You don’t even make any sense because IBM always sold software hardware and services like Apple.
Apple make chips with slave labor in China. We don’t want that.
Here is a crazy idea…Cut corporate taxes and have semi-conductor companies come pouring in, instead having once again having one of the highest rates in the World!
Nothing to do with it. It’s electricity costs, water cost, and environmental laws. Taiwan generates the majority of their power with coal and South Korea with oil. The large chip plants in the US are mostly in Oregon and Idaho where they got cheap hydro power.
So move them to Alabama where water is abundant and coal is a plenty.
He has no wrongdoing at all!
We can sit here and argue about whose fault it is all day. I think from a national security perspective that there are a few things that should be majority sourced domestically. Among them are computer chips, pharmaceuticals, and perhaps key metals.
With an expanding Chinese Navy (that already has more ships than the US Navy) we see more potential for disruption. I think its simply unwise to expose our country to potential cutoffs directly from China or indirectly from potential conflicts wars.
Southeast Asia used to be an intelligent place to outsource to. IT was a safe place to do business. That just isn’t so anymore. The reason for that is the leadership of the Chinese Communist party which makes it more a defense issue than a market issue. I am a free market advocate – but I am national defense first. We need chips and shouldn’t be held hostage.
I
China’s navy has more ships, but 1/3 the tonnage. A half a million patrol boats isn’t what I would call formidable. If that’s the case we should deputize and sent over the Cajun flotilla to kick their butts.
“Tonnage” equates to nothing these days since the advent of guided missiles. Teensy little ” swift boats” like you see in videos harassing our surface vessels in the Straits of Hormuz only have to be large enough to carry one surface to surface missile. Iran bought Chinese shore-to-ship supersonic anti-ship missiles years ago and there is next to no defense against them. Ukraine just proved that with the sinking of Putin’s Black Sea flagship and the Ukrainians used a subsonic missile.
I am fine with the US government continuing to help build a US located microchip industry AS LONG AS all there is some type of enforced investment by all auto companies to match US government funding for example a 50/50 ratio. This way the auto companies have skin in the game and do not run to Asia for supplies in 24 months. Lets face it, the US Auto companies have off shored so much that US suppliers closed up shops. If we invest, there needs to be a return on invest, this cannot be a non committal or non-guarrented contracts customer.
Uh, the return on the investment will be a healthy economy.
Good idea to encourage domestic manufacturing of chips. We need more of this to make American great again.
I thought there were laws about producing things vital to national security here already. what happened? Greed and stupidity, probably. Or other laws, or our incompetency. Didn’t the govt already renege on the USA made solar panels?
ITS SAD BUT IT DOESN’T CARE WHAT THE PARTS ARE THAT IS BEING MADE OUTSIDE THE U.S. , IT SAD THAT IT COMES DOWN TO THE ALMIGHTY DOLLAR!!
Nope !! NO WAY ! No more of our Tax dollars to subsidize a much-in-demand Industry that should be rushing to build their own manufacturing facilities given the high demand and low/slow supply. More Democrap Socialism and demands from the stooges running the Auto Companies….especially Barra.
New Ohio chip plant could cost 100 Billion, so a 52 Billion government bill may not be enough.
Upstate New York has fantastic large new chip plant coming online.
Texas will have more new plants soon. The build out, clean rooms, tool install,
each step is huge, expensive, hard, and requires workers.
This needs to be a long term commitment.
I’ve said it before and I’ll say it again. GM had it’s own chip making facility right here in Kokomo, Indiana. Under Mary Barra’s watch, the facility was shut down just prior to the “chip shortage” and production of chips was outsourced like almost every other automaker. GM completely surrendered what would have been a tremendous competitive advantage, due to short cited thinking. Now Ms. Barra is asking for Taxpayer money to correct HER wrong.
As I’ve stated before, based on the chip shortage of the last couple of years, I believe the shuttering of Kokomo was one of the most damaging “bad decisions” GM has ever made. That’s a pretty bold statement, as we are talking about General Motors after all. This needs to be discussed in all the glowing articles on how great Mary Barra has been for General Motors…
Wrong. Kokomo made the wrong kind of chips than are needed because they became obsolete in the 80’s.
There’s only two companies in the world that make the chips that are needed: Samsung and TSMC.
Since “GM is the EV leader” ~ Mary Barra, they are going to have to conceive, design, engineer and manufacture more unique ways to Kill. Gone are the decades of simple devices like Killer Ignitions. I propose something electrical. Now hear me out…
If Ford could Kill AND Cremate, why can’t GM’s latest Killing device include Killing by Electrocution? Everyone gets what they want: GM gets to Kill, Buyers get what they paid for, The families get back a body, mostly in tact, to bury. It’s a Win / Win.
Mary will just send the chips to the foreign countries where they build their cars. Pay your own way out of this or go broke.
The car companies don’t buy chips from chip manufacturers — they buy completed assemblies from lower level suppliers. When the chip shortage began, Ford admitted that it gave its suppliers all of two weeks commitment for exact production quantities. Chips are readily available — BUT, you have to be willing sign an 18 month purchase order, and pay market price (not “we are putting this out for competitive bids to China, Singapore, and Thailand”.
I know this article is old, but in case anyone here is actually waiting for the Chip Retrofit as I am, here’s what I experienced so far.
I just left the GMC Dealer that I bought my 2022 Sierra from in March that stated during the purchasing process, Chips not installed in the truck should be ready for installation beginning 2022 summer season. Today’s visit I learned that not only was the Service Department unaware of my missing Chip promises, but apparently, I was the only person up to this date to ever seek getting the missing Chips actually installed… People are paying good money for incomplete cars and not following up on these Retrofits it appears – at least at this Dealership.
Current situation is, The Parts Department is reaching out to GM to see how they should handle my Retrofits.
I totally agree with you! That just proves my point, GM is fast loosing their reputation on building cars an trucks! ITS NOT ABOUT REPUTATION ITS ABOUT MONEY! WHATS WRONG WITH THIS PICTURE, PEOPLE IS PUTTING DOWN THEIR DEPOSITS TO ORDER A CAR OR TRUCK AN GM KNOWS DAMN WELL THAT THEY DON’T HAVE THE PARTS TO BUILD THE VEHICLE BUT GM STILL LETS THE DEALERSHIPS TAKE ORDERS AN DOWN PAYMENTS! WHERE IS ALL THAT MILLIONS GOING?
OH I HEARD GM IS GOIG TO BUILD A NEW PLANT IN A Communist country, WONDERING IF THERE WILL BE A CHIP PROBLEM OVER THERE? OH I REMEMBER THATS WHERE THERE MADE GO FIGURE!
I WONT BUY ANYTHING THAT ISN’T COMPLETE , REGARDLESS WHO THE MANUFACTURERS ARE THEY ( SHOULD NOT BE ALOUD TO SELL A PRODUCT UNLESS IT IS 100% USEFUL! IF IT ISN’T ITS NOT COMPLETE NO EXCUSE PERIOD!!! I WOULD HAVE DOUBTS ABOUT BUYING A NEW VEHICLE WHEN GM HAS MY DOWN PAYMENT AN NOT KNOWING WHEN IM GOING TO BE TO GET IT. BUT GM HAS MY MONEY AN STILL TRYING TO SELL ME A VEHICLE THAT ISN’T COMPLETE! THE SIZE OF GM I CAN’T BELIVE HEADS ISN’T ROLLING! ILL BET IF PEOPLE QUIT BUYING FROM THEM PROBLEM WOULD BE SOLVED!! BUT THEY DON’T CARE, THEY ARE MORE WORRIED ABOUT BUILDING A PLANT IN COMMUNIST CHINA, REMEMBER WHAT IS ON CHINAS GROUND CHINA OWNS!!!
Bob,
How long have been in school? Your grammar is atrocious.
David, YOU ARE DEFINITELY ON DRUGS! WHAT I SAID IS THE TRUTH, IT IS PLAIN SIMPLE ENGLISH! YOU MUST WORK FOR GM TO THINK LIKE THAT, AN YOU DON’T WANT TO OR CAN’T HANDLE THE TRUTH!
Bob,
I didn’t say that I disagreed with you. I just said that you have bad grammar. Slow down and collect your thoughts. I, like you will never buy an incomplete vehicle nor will I pay over sticker to get said incomplete vehicle. I don’t need to keep up with the Jone’s that bad. The fleet of Chevrolet’s that I have nave serve me just fine.
I was raised with my family always buying GM VEHICLES, AN I AM 68 YEARS OLD AN HAVE BEEN BUYING CHEVYS USED AN NEW . BUT WHAT GM IS DOING NOW IM BE GETTING TO WONDER! IM NOT STUPID AN I DON’T NEED SOMEONE TELL ME HOW TO TALK IN ENGLISH, THERE IS NOTHING WRONG WITH THE WAY I EXPRESSED MY STATEMENT, IM RETIRED FROM THE NUCLEAR PROFESSION AN YOU ARE THE ONLY
PERSON THAT DOESN’T UNDERSTAND THE ENGLISH LANGUAGE IN WHICH COMMON SENSE IS SPOKEN ALONG WITH THE TRUTH,TO BAD YOU THINK IM NOT POLITICAL CORRECT!