Hearing Examined How Congress Can Unlock Automotive Innovation By Leveraging Semiconductor Chips & Other Technologies
DETROIT, MI – U.S. Senator Gary Peters (MI), a member of the Senate Commerce, Science and Transportation Committee and Chairman of the Commerce Subcommittee on Surface Transportation, Maritime, Freight and Ports, today led a field hearing at the Detroit Regional Chamber to examine how Congress can help bolster U.S. innovation for electric and autonomous vehicles by increasing domestic production of semiconductor chips and other technologies, while also delivering economic, environmental, and safety benefits for the American people. Last week, the Senate Commerce Committee held a hearing to assess the role semiconductors play in American manufacturing at-large. The field hearing Peters convened today helped build on those efforts by further examining how semiconductors impact innovation in the automotive industry specifically.
The hearing – titled “Made in America: The Future of Automotive Innovation and Semiconductor Chips” – featured testimony from leaders on how Michigan can be positioned to continue being a leader in the future of mobility, including Glenn Stevens, Executive Director, MICHauto; Jay Rathert, Senior Director of Strategic Partnerships, KLA; Steve Dawes, Director, UAW Region1D; and Garrick Francis, Vice President of Federal Affairs, Auto Innovators.
“Today, we’re bringing the committee to Michigan – because it’s here where this is not an abstract concept by any means – this is where auto manufacturing, the chip shortage, and related challenges are all taking place each and every day,” said Senator Peters during his opening remarks. “And this is where I think we will be continuing to lead into the future…Michigan established the American auto industry, transforming mobility and society, and quite frankly built the middle class, and will continue leading for many years into the future.”
“…This chip shortage resulted in temporary layoffs, causing hardships for workers in an already challenging time. It also cut into one of the main drivers of our national economy, which is auto production. This is especially concerning because looking toward the future – cars will become even more dependent on chips,” Peters continued. “…Here’s the bottom line: we must remain focused on making our supply chains resilient by manufacturing critical goods in America. That includes semiconductor chips, but other supplies that are essential to millions of American jobs, like the auto industry.”
To watch video of the hearing Senator Peters convened, click here.
Peters is leading the charge – and has repeatedly pressed for action – to address the ongoing semiconductor shortage that has stymied automotive innovation in recent years, and impacted workers and industries across the country – including the Michigan auto industry. Peters secured multiple provisions in the U.S. competitiveness package that passed both the Senate and House of Representatives to bolster U.S. semiconductor production, including to create a $2 billion supplemental incentive fund to support the domestic production of mature semiconductor technologies in the coming years and ensure that semiconductor projects that support critical manufacturing industries are given priority status, which would include the automotive sector. This is in addition to $50 billion already in the bill to incentivize the production of semiconductors of all kinds in the U.S.—for a total of $52 billion.
The competitiveness bill also includes Peters’ bipartisan Investing in Domestic Semiconductor Manufacturing Act, which would ensure that federal incentives to boost domestic semiconductor manufacturing include U.S. suppliers that produce the materials and manufacturing equipment that enable semiconductor manufacturing. In doing so, the legislation strengthens the supply chain for semiconductors and bolsters Michigan manufacturers. The package also authorizes increased funding for the Manufacturing Extension Partnership program, which has been a priority for Peters. Congress must now work to finalize the competitiveness the bill, negotiating differences between the House and Senate-passed bills.
Additionally, Peters has raised this supply chain disruption with numerous Biden Administration officials in conversations both before and after President Biden took office – including during a roundtable discussion with Commerce Secretary Gina Raimondo in Michigan. Peters has also introduced and advanced bipartisan legislation in the Senate to streamline federal efforts to strengthen and expand domestic manufacturing of semiconductor chips and bolster American semiconductor production and supply chains.
Below is the text of Senator Peters’ remarks, as prepared for delivery:
“I want to begin by explaining why we are here in Detroit. Last week, the Senate Commerce Committee had a hearing in Washington, D.C. about semiconductors and their role in manufacturing and the economy.
“Today, we’re bringing the committee to Michigan – because it’s here where this is not an abstract concept by any means – this is where auto manufacturing, the chip shortage, and related challenges are all taking place each and every day. And this is where I think we will be continuing to lead into the future.
“Our communities and families are steeped in these issues, and it’s important to have this conversation among the people and places that are experiencing them.
“Michigan established the American auto industry, transforming mobility and society, and quite frankly built the middle class, and will continue leading for many years into the future. When Henry Ford introduced the first Model T of assembly line fame back in 1908, it did not contain a single semiconductor chip.
“Indeed, for several more decades, that continued to be the case. By the 70s – some cars contained a handful of chips.
“The role of chips in automobiles has ballooned since then, with modern cars using well over 1,000 semiconductor chips or more - spanning various costs, functions, and technologies.
“Given these developments, it’s no surprise that a global chip shortage following the COVID-19 pandemic had a devastating impact on the auto industry.
“This chip shortage resulted in temporary layoffs, causing hardships for workers in an already challenging time. It also cut into one of the main drivers of our national economy, which is auto production.
“This is especially concerning because looking toward the future – cars will become even more dependent on chips.
“As President Biden has said in visiting both Ford and GM right here in Michigan, ‘the future of the auto industry is electric.’ I would make a small addition to that statement: the future of the auto industry is electric as well as connected and autonomous.
“In terms of electrification, novel semiconductor technologies promise to reduce charging times – extend range – and enhance performance for Electric Vehicles, among other benefits.
“Not only will Electric Vehicles help save our planet by combatting climate change – they will also reduce our dependence on foreign energy sources and protect Americans from unpredictable gas prices.
“When it comes to connected and autonomous vehicles – semiconductors chips will power the Artificial Intelligence and other capabilities necessary to make self-driving cars possible.
“This aspiration can’t become reality soon enough – because lives are quite literally on the line.
“Tragically, recent data shows that during the first nine months of 2021 – an estimated 31,720 people died in car crashes. This represents a jump of 12 percent compared to 2020. This is completely unacceptable.
“Achieving a future with zero fatalities on our roads will be challenging and require many approaches – there is no silver bullet. But autonomous vehicles hold great promise to play a major role in reducing injuries in deaths by eliminating human error and impaired driving, which are commonly involved in crashes.
“These trends – electrification and autonomy – mean that in the coming years, chips will play an even greater role in the most essential functions of automobiles: driving and powering the vehicle.
“So how do we prepare for this future, and how do we prevent a repeat of problems like the chip shortage?
“We need to shore up our supply chains by making the things we need, right here in America.
“The pandemic has delivered a painful message. Our supply chains are efficient, but they are not resilient. So when something goes wrong, problems pile up quickly, depriving Americans of the things they rely on and contributing to inflation. And much of this is due to the fact that we are too reliant on overseas production.
“Through my role leading the Committee on Homeland Security and Governmental Affairs, in 2019, I released a report on prescriptions drugs.
“Among other issues, we found that America was over-reliant on foreign manufacturers for prescription drug materials – and that we were poorly prepared in the event of a pandemic. Little did we know that a pandemic would be just around the corner a few months later. And we saw our overreliance with PPE and other challenges during COVID as well.
“Fortunately, companies from GM and Ford and other auto suppliers stepped up during the pandemic by repurposing their facilities to produce essential items like ventilators and masks. But in the long term, we need a national strategy to protect our country.
“Whether it comes to chips for the auto industry or other essential goods and materials, we need to start securing our critical supply chains. This is something we’re already doing when it comes to national defense.
“As a former Naval officer in the U.S. Navy Reserve – and now a member of the Senate Armed Services Committee – I have fought to ensure that critical defense assets are made in the United States.
“For example, Marinette Marine, which is right along the Michigan-Wisconsin border, is building the Navy’s Littoral Combat Ships – with about half the workers coming from Michigan, employing hundreds of Michiganders.
“We would never rely on the Chinese government to build our warships. We build them here in America with American workers to ensure that in times of need, our military is prepared.
“We must apply that same approach here with semiconductor chips – especially given how they are central to everything from automobiles to lifesaving medical devices.
“That’s why it is imperative that Congress funds the CHIPS Act.
“In particular, legislation I led with Senator Stabenow would provide $2 billion to incentivize the domestic manufacture of the so-called legacy chips that are in short supply and that manufacturers of all kinds rely on – especially in the auto industry. This $2 billion is in addition to $50 billion to ensure the United States becomes a leader in the manufacture of advanced chips and new semiconductor technologies that will drive innovation.
“Here’s the bottom line: we must remain focused on making our supply chains resilient by manufacturing critical goods in America.
“That includes semiconductor chips, but other supplies that are essential to millions of American jobs, like the auto industry.
“I look forward to hearing today’s testimony about how we can build up American auto manufacturing and our economy by leveraging American-made chips and critical supply chains.”
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