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Detroit Three meet with White House on semiconductor chip shortage

Riley Beggin, The Detroit News on

Published in Automotive News

WASHINGTON — The CEOs of the Detroit Three and major tech companies met virtually with President Joe Biden and senior administration officials Monday to discuss the ongoing shortage of semiconductor chips, which have forced automakers to scale back production.

General Motors Co.'s Mary Barra, Ford Motor Co.'s Jim Farley and Stellantis NV's Carlos Tavares were expected to make the case for setting aside a portion of chips for the auto sector, which uses "legacy" chips rather than the advanced chips used in electronics and which take up a small share of chips worldwide.

The CEOs of major tech companies such as Google, Dell, HP, Samsung and AT&T also attended, as did the CEOs of major chip producers including Intel, Taiwan Semiconductor Manufacturing Co., NXP and Global Foundries.

The president was scheduled to "briefly join" the meeting hosted by National Security Advisor Jake Sullivan, National Economic Council Director Brian Deese and Secretary of Commerce Gina Raimondo.

AlixPartners, a global consulting firm, has estimated that the industry has lost 1.4 million vehicles of production globally due to the chip shortage. The firm predicts up to 2.5 million vehicles could be lost this year and the industry as a whole would lose $61 billion if the trend continues.

Last year, people home-bound during the coronavirus pandemic spent more on electronics, prompting chip manufacturers to boost supply to tech companies as automakers slashed orders in the early days of the pandemic.


Semiconductor chips are crucial vehicle components, powering GPS, power steering, crash detection systems and more. When automakers restarted their plants last spring after an eight-week shutdown, the supply crunch failed to keep pace with unexpected demand for new vehicles in 2020.

Auto industry leaders have said that a portion of funding in federal proposals aimed at bolstering U.S. chip production should be set aside for the auto industry to prevent this from happening in the future, arguing automakers' plans to increase production of electric vehicles — which fits into the administration's goals to cut emissions from the transportation sector — may depend on it.

Asked Monday whether the administration would fulfill the automakers' request, officials were noncommittal.

"One of the reasons the president is stopping by this meeting... is to hear directly from companies about the impacts, what would help them most through this period of time," White House Press Secretary Jen Psaki said Monday.


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