America’s Supply Chain Crisis
Brad Greve knew it was just a matter of time before the computer chip shortage disrupting the auto industry had a ripple effect on aluminum manufacturing in Iowa.
Greve and his colleagues at Arconic’s Davenport Works—members of United Steelworkers (USW) Local 105—supply the Ford F-150 pickup and other vehicles.
Automakers forced to cut production because of the semiconductor crunch scaled back the amount of aluminum they take from the facility, just as Greve expected, posing another potential setback to a plant already fighting to rebound from the COVID-19 recession.
America cannot afford to jeopardize major industries for want of parts.
The nation’s prosperity depends on ensuring the ready availability of all of the raw materials and components that go into the products essential for crises and daily life.
That will mean ramping up domestic production of the semiconductors—now made largely overseas—that serve as the “brains” of automobiles, computers, cell phones, communications networks, appliances and life-saving medical equipment.
But it also will require building out supply chains in other industries. For example, America needs to produce titanium sponge for warplanes and satellites, pharmaceutical ingredients for medicines and the bearings that keep elevators and other machinery running.
The failure of just one link in a supply chain—as the semiconductor shortage shows—has the potential to paralyze huge swaths of the economy. That’s why it’s crucial not only to source components on U.S. soil but to incorporate redundancy into supply lines so an industry can survive the loss of a single supplier.
“It’s that ripple effect,” said Greve, president of Local 105, recalling the time when a fire at a die-cast parts supplier disrupted production of the F-150. “If you shut down a car manufacturer—or they can’t get one part—you can affect a whole lot of jobs around the country.”
COVID-19 interrupted computer chip production even as demand for televisions, home computers and other goods soared among consumers locked down in their homes. Now, neither U.S. automakers nor manufacturersof other goods can obtain adequate amounts of the semiconductors they need.
Because of the shortage, carmakers cut shifts and laid off workers. The production cuts come as the nation needs the boost from auto sales—and other items containing semiconductors—to climb out of the recession.
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