Ford Authority

Biden Administration Reportedly Unlikely To Redirect Chips To Automakers

Since meeting with automakers last month regarding the semiconductor chip shortage, President Joe Biden and his administration have been mulling their options in regards to what the government can do to help solve the problem. Biden has since promised to create legislation that directly addresses the issue and provide congressional funding to support production, but there’s one more option he can take as well – invoke the Defense Production Act and redirect available chips to automakers. However, it doesn’t appear that this is likely to happen.

A senior Biden administration official told Reuters that “the short-term outlook” of such a move is “challenging,” as it “would result in fewer chips for others” – meaning manufacturers of electronic items, whether they be of the consumer, commercial, or even medical variety. The Defense Production Act was enacted in 1950 following the start of the Korean War and authorizes the president to regulate materials deemed necessary for national defense.

Using this power to redirect chips to automakers would certainly help ramp production back up, but it would come at the expense of numerous other industries. Regardless, the Biden administration has reportedly not made a decision on the matter just yet and is in the process of completing a 100-day review stemming from Biden’s executive order issued in February that intends to discover ways to ramp up the domestic production of semiconductor chips.

In the meantime, Ford is working to allocate the chips it has to its most profitable and significant models, and is also making changes to its supply chain to prevent problems like this from happening again in the future. That includes completing its own battery manufacturing in-house. However, the world’s largest supplier of chips – Taiwan – as well as a number of experts and industry executives don’t see an easy solution nor a quick end to the chip shortage.

We’ll have much more on the chip shortage very soon, so be sure and subscribe to Ford Authority for ongoing Ford news coverage.

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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  1. whypac

    The only thing to do here is bring chip manufacturing back to the USA. Everything uses microchips. Everything. The current state of affairs should be a giant red flag screaming “National Security Problem”.

  2. CE

    That rule should only be used to national defense as intended, but the correct way to address this might be some incentives to build up chip manufacturing in the USA, but along with those incentives would be an agreement to keep those in the USA! Many, many products required chips these days & not going to end anytime soon.

  3. Me

    Did you expect this bozo to do something in the best interests of America? Fake elections have consequences.

  4. I Miss Mulally

    Did anyone really think the Harris-Biden administration would do ANYTHING for auto manufacturers?

    1. Lee Glidewell

      The current occupants of 1600 Pennsylvania Avenue are the ‘national security problem’, and yes, FoMoCo and it’s CEO oughta be ashamed of itself/himself.

  5. Mark L Bedel

    It’s always easier to purchased a finished product elsewhere because one doesn’t have to invest in the infrastructure to create it. This helps keeps the total cost of whatever good you’re purchasing lower particular manufacturers to do what they do best manufacture. The pandemic messed with supply chains everywhere including here, so I don’t know that if these chips were manufactured here, that there still wouldn’t be a supply issue. Oh yes, maybe there wouldn’t be for the deniers!


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