Eight U.S. auto state governors urge Biden to press semiconductor firms on chip shortage

[February 27, 2021]  By David Shepardson

WASHINGTON (Reuters) - A bipartisan group of eight governors from U.S. auto states on Friday urged Democratic U.S. President Joe Biden to do more to press semiconductor firms to address a global shortage of automotive chips that has cut some vehicle production.

The governors of Michigan, Indiana, Ohio, Kentucky, Kansas, South Carolina, Alabama and Missouri asked Biden in a letter to join foreign governments in urging semiconductor and wafer companies to expand production and "temporarily reallocate a modest portion of their current production to auto-grade wafer production."

Michigan Governor Gretchen Whitmer, a Democrat who led the effort to get other governors to sign, said she was urging Biden "to do everything in his power and to leave no stone unturned to protect auto jobs throughout the supply chain at risk because of this shortage."

The White House did not immediately comment, but auto executives met on Wednesday with White House officials and discussed the issue. Lawmakers have also urged the White House to pressure chip manufacturers to boost auto chip supply.

Biden said on Wednesday he would seek $37 billion in funding for legislation to supercharge U.S. chip manufacturing and signed an executive order aimed at addressing the global semiconductor chip shortage.

President Joe Biden delivers holds a semiconductor chip as he speaks prior to signing an executive order, aimed at addressing a global semiconductor chip shortage, in the State Dining Room at the White House in Washington, U.S., February 24, 2021. REUTERS/Jonathan Ernst

Automakers hit by the shortage include General Motors Co, Ford Motor Co, Volkswagen AG, Toyota Motor Corp, Nissan Motor Co, Stellantis and Subaru Corp.

Ford said a lack of chips could cut production by up to 20% in the first quarter and lower the company's adjusted earnings by $1 billion to $2.5 billion.

GM said the shortage could shave up to $2 billion from 2021 profit as it has been forced to cut output at factories in the United States, Canada, Brazil and Mexico.

A shortage of auto semiconductor chips could impact nearly 1 million units of global light vehicle production in the first quarter, data firm IHS Markit said.

(Reporting by David Shepardson in Washington; Editing by Chizu Nomiyama and Matthew Lewis)

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