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Ford-Backed Interest Group Calls For Government To Address Microchip Shortage

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Despite strong Q1 sales across the entire automotive industry, new vehicle inventory continues to shrink amid the ongoing microchip shortage. Ford’s production has taken a major hit in recent months, as the automaker lost a total of 44,000 units last week alone as a direct result of the microchip shortage. Now, Ford-backed interest group Alliance for Auto Innovation wants the government to intervene.

Specifically, the group wants the U.S. Commerce Department to dedicate a portion of funding to a bill that proposes expanded semiconductor chip production in the U.S. That funding would “be used to build new capacity that will support the auto industry and mitigate the risks to the automotive supply chain evidenced by the current chip shortage,” Alliance for Auto Innovation chief executive, John Bozzella, wrote in a response to a government-initiated review.

Bozzella also said that the U.S. government should ensure that “a particular percentage – that is reasonably based on the projected needs of the auto industry – be allocated for facilities that will support the production of auto-grade chips in some manner.” Bozzella warned that if the government does not intervene, the chip shortage could disrupt production for another six months and result in 1.28 million fewer vehicles being built this year.

That projection is far grimmer than Ford CEO Jim Farley‘s prediction that the crisis would be over by the start of Q3. While FoMoCo and other automakers are currently adjusting their supply chain strategies to help mitigate the effects of the shortage, White House officials will meet with both chipmakers and automakers next week, while President Joe Biden is also seeking $37 billion in funding to boost chip production in the U.S.

We’ll have more on the ongoing chip shortage and its impacts on automotive production soon, so be sure and subscribe to Ford Authority for non-stop Ford news coverage.

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Written by Brett Foote

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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7 Comments

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  1. All the major automakers, every single one of them, jumped on the China train and reaped the rewards of cheap Chinese parts instead of building a stable American parts/chips infrastructure!! Now they want us to subsidize their profit taking??? Build them a chip supplier they can rely on? Had they bought and supported American semiconductor companies they wouldn’t be in this mess!!

    • So very true……all the companies both in and out of the automotive business that got sucked into the cheap China parts network are now in trouble. You reap what you sow and now its really coming true. Creepy Uncle Joe needs to stop using taxpayer money to bail out bad decisions by the automotive sector.

  2. Sure China Joe will help you. Maybe instead of donating money to political parties you should have invested in American infrastructure and keeping jobs here.

  3. The challenges of a free and open market….. seems you guys only like it when it goes your way. Before you set your hair on fire, understand that these events (chip shortage) may have good upside for the U.S. and rekindle domestic production. Regardless, if you can’t/won’t compete, you will be kicked to the curb metaphorically speaking. Remaining an island in the sea of global trade is never a good idea for any country. Just sayin…

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