US Sens. Stabenow, Peters on cusp of securing billions to improve auto supply chain

In what may someday turn out to be a boon to manufacturing in Michigan, the U.S. Senate on Thursday advanced a bill that includes new rules to push government to buy more American-made products and invests more than $50 billion in the manufacturing of semiconductors, a shortage of which is currently crippling the auto industry.

U.S. Sens. Debbie Stabenow and Gary Peters, both Democrats from Michigan, played key roles in promoting both the "Make It In America" provisions in the legislation and a $2 billion set-aside to incentivize the production of earlier generations of semiconductor chips still used in many vehicles. Such chips are now in high demand because of a worldwide shortage.

 In a rare show of bipartisanship, the Senate voted 68-30 to limit debate on the overall legislation. Final passage is expected June 8, when the Senate returns following the Memorial Day holiday and an in-district work period.

"It's very important that we have as part of the bill the needs of manufacturing," Stabenow told the Free Press, referring to the bill that initially was more focused on improving American research and development and taking more modest steps to combat the ascendancy of Asian production — especially those controlled by Chinese companies — in supply chains.

"People were looking at communications (devices), at national security ... a whole range of things. They were not focused on manufacturing," Stabenow said. "We spent a lot of time (convincing other senators) this is very important."

After limiting debate, passage in the Senate was almost a foregone conclusion, as was its likely adoption in the U.S. House, which has a Democratic majority, albeit a small one.

Funding could help automakers, suppliers in future

The funding is unlikely to ease the immediate chip shortage, which has forced Detroit automakers to shutter some plants while they wait for supplies. But it could result in more chip fabrication foundries being built in the U.S. and reducing  the likelihood of a similar shortage in the future.

Those foundries may not be built in Michigan but they are crucial to automakers and their suppliers, which have more employees in Michigan than any other state.

"You can't be a great country if you don't actually make things," Peters told reporters on Wednesday. "Our focus is on bringing that manufacturing here."

The chip shortage is the result of the disruptions caused last year by the COVID-19 pandemic. As auto companies stopped production to meet stay-home orders to slow the spread of the coronavirus  and sales of computers and other personal electronic devices increased, chip makers, especially those in Asia, switched production to make chips for those other products.

The Biden administration has been working to address the shortage but there's little that can be done immediately. General Motors has been parking tens of thousands of vehicles around the nation, waiting until the necessary parts arrive, though there have been some signs of easing: GM said Thursday that it will bring six of its factories back online earlier than expected, including Lansing Grand River, which will open June 21, a week ahead of schedule.

Peters, who shepherded the provision through the Commerce Committee, of which he is a member, also managed to insert rules that direct the funding toward companies or consortiums willing to pay union wages. But that provision may be under threat from an amendment proposed by Sen. John Cornyn, R-Texas, to be taken up before the final vote on June 8.

Stabenow, Peters been pushing 'Buy American' rules for years

The "Make It In America" part of the bill was something Stabenow has been hammering away at for more than four years and now  finally appears on the verge of winning approval.

Since the 1930s, U.S. government agencies have been required to purchase, when able, American-made products. But officials in those agencies can waive those requirements for various purposes, including cost, without any notice to other companies that might want  to bid on the contracts.

In 2018, Stabenow's office compiled a report showing that, between 2008 and 2016, some $92 billion had gone to foreign manufacturers for products.

The legislation promoted by Stabenow, which Peters has also co-sponsored and is now part of the new bill, called for the creation of a specific office to review whether those waivers should be allowed and require that they be publicly documented. Agencies would also have to take into consideration whether or not an award to a company helps improve employment in the U.S. or not.

President Joe Biden has already put in place many of those new rules through executive order — but an order can be overturned by the next president.

It's much more difficult to overturn a law requiring it.

Stabenow said it's difficult to exaggerate the importance such a change could potentially have in Michigan, which still has a vibrant manufacturing base. "It ...  is purchasing vehicles," she said. "But we also make furniture, we make appliances."

Stabenow and Peters could have even more accomplishments to tout in coming months. Peters has continued to push for policies that could allow automakers to put more self-driving vehicles on the road, even though that was kept out of this recent legislation. And amid a push to get more people to buy electric vehicles, Stabenow on Wednesday won committee approval of a measure to keep a $7,500 tax credit for anyone buying one, with that amount going up by $2,500 for autos made in the U.S., and another $2,500 for those made in union plants.

It still has to go before the full Senate, where it could face hurdles, but Stabenow is confident that if it could get on a package requiring only a majority vote, it will pass.