A Chip Problem of Detroit’s Own Making

Sen. Stabenow scapegoats Taiwan for a miscalculation by U.S. car makers 

By Rupert Hammond-Chambers. Excerpts:

"American auto makers face a shortage of computer chips, and Sen. Debbie Stabenow blames the “decision” of “a single company in Taiwan, which has reduced its shipments.”

That statement is both incorrect and misleading. Sen. Stabenow’s demagoguery of a foreign company stops the U.S. from meeting the challenge of getting American auto workers back to work.

The American automobile industry does face a chip-supply issue, but it is primarily of its own making. The industry itself miscalculated its production needs in early 2020. At the onset of the Covid-19 pandemic, U.S. car makers significantly reduced their orders for chips, expecting a significant reduction in demand for vehicles. That drop in demand turned out to be less than they anticipated, leaving the industry with chip orders insufficient to match their manufacturing needs."

"If governments can pressure companies, foreign or domestic, to change legally binding contracts in the interest of preferred business sectors like autos, that raises serious concerns about the nature of international commerce and the laws that govern it."