Semiconductor shortage having an impact on manufacturers, workers

Published: Jun. 22, 2021 at 8:29 PM EDT
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LANSING, Mich. (WILX) - Local automotive companies are battling the strain of microchip shortages. Employees are losing work, And thousands of cars remain parked as they cannot be completed without the chips.

The shortage has lasted for months now, causing some local plants to shut down. U.S. Representative Elissa Slotkin spoke Tuesday about how her taskforce wants to resolve the problem.

“This problem is not going away any time soon,” Slotkin said. “So, we’ve come up with a bunch of recommendations for legislation that would incentivize more production in the US.”

Representative Slotkin and local members of the United Auto Workers union say these shortages have highlighted what they consider to be an issue of outsourcing from other countries.

UAW Local 602 President Mike Huerta said, “Stability needs to come from manufacturing those things here, knowing where they are, knowing we’re getting our parts from right down the road. It’s a lot easier than international supply chains that have failed us repeatedly.”

UAW Local 602 Shop Chairmen Jeffery Kosloski Jr. said, “You know, I sometimes don’t sleep at night knowing that I have to be the guy to answer the 2,400 people at the plant that are wondering, ‘Hey! What’s going on what’s the next announcement? Are we working tomorrow? Are we going home early?’”

The U.S. has received these chips and other resources from countries such as China and Taiwan. Representative Slotkin says we could prevent shortages if resources were received in the U.S., but industry researchers say that’s not a simple task.

Bernard Sweicki is the Research Director at CAR.

Sweicki said, “Every time auto makers think about taking a given good that they’ve been buying from another supplier and bringing it in in house there is this question; ‘Can I achieve those same price levels, quality levels, and so on…?’”

Sweicki says changing supply chain practices to produce more products in the us would take years to accomplish.

“Sourcing more microchips from the United States is certainly a possibility,” Sweicki said. “But it’s a long term one because it’s a matter of years from when a new plant is announced to when it’s built to when it actually starts producing output.”

Representative Slotkin says incentives for local production could make it more cost-effective for businesses. She says her team is going to continue working on the chip shortage throughout the summer.

Experts say the shortage could lower the value of cars if they continue to sit in parking lots much longer.

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