Report: Biden Admin May Link Semiconductor Subsidies to Unions

Despite the semiconductor shortage having encouraged the automotive sector to repeatedly idle factories, word on the ground is that things are becoming more stable. Companies are seeing less production downtime overall and workers are reporting more reliable working conditions across the board. However, several automakers have continued to express concerns (e.g. Volvo), alleging that chip shortages could stretch deep into 2022, while the U.S. government ponders how to advance chip production in-country and become less dependent on Asian suppliers.

Commerce Secretary Gina Raimondo has been touring Michigan, meeting with union members and industry heads, and plans to urge Congress to move on a $52 billion in funding bill aimed at boosting domestic production. We’ve questioned the efficacy of the CHIPS Act before, primarily in relation to how the subsidies would be allocated. But there are new concerns that the plan will mimic the Biden administration’s EV subsidies by spending heaps of taxpayer money and giving union-backed organizations a larger cut.

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Automakers Accused of Chip Hoarding, U.S. Considers Defense Production Act

Despite the occasional media report claiming that the semiconductor shortage is nearly over, reality looks quite a bit different. Some manufacturers have managed to temporarily stabilize supply chains, even though others have continued announcing work stoppages as they run out of chips. Wait times for the electronic components have also increased by about 61 percent since the beginning of 2021. Meanwhile, a recent Kelly Blue Book survey had 48 percent of respondents saying they were going to postpone buying a new automobile until shortages end, prices come down, and they can actually find the vehicles they’re looking for. But even those that were willing to buy now expressed a surprising level of acceptance to abandon brand loyalty or their preferred body style just to get a fairer deal on an automobile.

With the United States fairing worse than other regions in regard to chip availability, the White House has been under pressure to solve the problem all year. Thus far, government strategy has focused on encouraging investments for new semiconductor production. But there’s a new gambit being proposed that would invoke a Cold War-era national security law that would force manufacturers to furnish information pertaining to semiconductor supply lines and chip sales.

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  • TCowner We've had a 64.5 Mustang in the family for the past 40 years. It is all original, Rangoon Red coupe with 289 (one of the first instead of the 260), Rally Pac, 4-speed, factory air, every option. Always gets smiles and thumbs ups.
  • ToolGuy This might be a good option for my spouse when it becomes available -- thought about reserving one but the $500 deposit is a little too serious. Oh sorry, that was the Volvo EX30, not the Mustang. Is Volvo part of Ford? Is the Mustang an EV? I'm so confused.
  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.