MACKINAW ISLAND, Michigan — The final version of Congress' economic competitiveness bill including $52 billion for semiconductor chip production is still amorphous — a delay that's a cause of concern for many of Michigan's state and federal policymakers.
Those leaders are attempting to attract new electric vehicle production to the state while a global chip shortage continues to force automakers to idle plants.
If Congress can't pass the legislation before the end of July, when members go back to their districts and their efforts become trained on re-election this fall, they fear it will continue to impact competitiveness and hamper the economy.
"The pace of this is not commensurate with the importance it will have in the country," U.S. Rep. Elissa Slotkin, D-Michigan, told The Detroit News Thursday.
"I know what it looks like when Speaker (Nancy) Pelosi and Leader (Chuck) Schumer actually put their energy behind something, and I know when they're going through the motions."
Kicked off by the coronavirus pandemic, the chip shortage has cost the global auto industry hundreds of billions of dollars and, this year alone, suppressed production by nearly 2 million expected vehicles, according to estimates from AutoForecast Solutions LLC. It's been a wake-up call to the industry and revealed far-flung supply chains vulnerable to disruption.
Chips are used in everything from cell phones and kitchen appliances to power steering and infotainment in cars. And they're becoming even more crucial for automakers, as electric vehicles require at least twice as many chips as a gas-powered car.
An influx of money to build domestic stores of semiconductor chips has been crawling its way through Congress wrapped in an expansive package aimed at increasing competitiveness with China.
During a keynote speech Thursday at the Mackinac Policy Conference, Michigan Gov. Gretchen Whitmer once again called for Congress to pass the funding: "We should all urge our delegation to get this done as soon as possible."
But it's been slow going: A Senate version of the bill passed last June, a House version passed in March, and a committee tasked with reconciling the two just met for the first time three weeks ago.
Steve Croley, chief policy officer and general counsel for Ford Motor Co., said they're advocating for Congress to pass a comprehensive competitiveness bill, but the chips funding alone would be an acceptable "Plan B."
"We need, as a country, to re-domesticate the supply chain for semiconductors. That's not a short term project... but the Chips Act will catalyze that," he said.
Ford signed a non-binding memorandum of understanding last year with chip supplier GlobalFoundries to increase chip supplies — "and we will take that to the next level once the Chips Act is funded."
GlobalFoundaries "and other companies are making real-time decisions about their footprint, and they're not going to wait to decide whether to build their next facility in the United States or somewhere else," he said. "So the urgency of the Chips Act is to make sure that the United States is a competitor as companies like companies like Global Foundries make those decisions."
U.S. Rep. Haley Stevens, D-Michigan, serves on the committee, along with U.S. Rep. Dan Kildee, D-Michigan, Sen. Gary Peters, D-Michigan, and more than 100 other members of Congress.
Stevens said she's "cautiously optimistic" the legislation can be finished by July 4, but "it's a question of what becomes an ultimatum for some members" whether that deadline could be met.
"There's a real urgency. I worry about the signals that this sends to markets if we don't get this legislation passed," Stevens said. "While the legislation doesn't solve the chip shortage, it certainly sends a lot of certainty into the marketplace. Not sending that message of certainty would be reckless."
While the chips funding enjoys bipartisan support, the two bill versions include several other provisions that the committee must work through.
While the Senate version passed with bipartisan support, the House bill includes several provisions that have drawn opposition from Republicans, including increased tariffs on lower-value Chinese imports, a screening protocol for American companies' investments in China and elsewhere, tighter labor and environmental rules for countries seeking tax reductions on imports, and $8 billion for the U.N. Green Climate Fund aimed at combating global climate change.
"They unfortunately junked it up with a lot of other stuff," said U.S. Rep. Bill Huizenga, R-Michigan, who voted against the House bill. "It's a very important issue. We've got make sure we've got a secure supply chain ... I just wish we would focus in on that thing we could get. I think we could get really bipartisan support for it, but that doesn't seem to be the goal."
Many Senate Republicans support the version that passed through their chamber, Peters said, but House Democrats don't love the idea of ditching their bill.
"So that's kind of where the rub is right now," he said. "But it's manageable. I feel like we're making headway."
He added that the "real hard stop" is the end of July, before both chambers go into a month-long district work period that will prevent movement on legislation.
There's bipartisan support for the chips funding, so Peters and Slotkin said they would do whatever they can to pass the $52 billion even if it means letting go of other pieces of the legislation.
"I'll take progress over perfection," Slotkin said. "I will take half a loaf over no loaf."
