The world’s leading manufacturers of heavy-duty trucks and truck engines have warned the Biden administration that a severe shortage of semiconductors is hindering their ability to produce enough trucks to meet freight demand.
In comments filed with the U.S. Commerce Department’s Bureau of Industry and Security, the Truck and Engine Manufacturers Association (EMA) asserted that the current supply constraints for semiconductors are causing manufacturers to adjust and suspend truck production.
“At a time when trucking companies are requesting many new highly-reliable trucks to enable them to meet freight shipping demands without delay, truck manufacturers are unable to produce enough trucks to meet that demand,” EMA asserted. “Additionally, the semiconductor supply constraints risk manufacturers’ ability to produce sufficient aftermarket repair parts to keep existing trucks on the road.”
EMA counts among its members Cummins Inc. [NYSE: CMI], Daimler Trucks North America, Navistar [NYSE: NAV], PACCAR [NASDAQ: PCAR] and Volvo Group North America. Volvo subsidiary Volvo Trucks North America recently told FreightWaves it is bracing for “down days” as a result of the shortage. PACCAR said it is averting downtime by parking unfinished trucks and reinserting them on assembly lines when chip supply improves.
EMA’s comments are in response to the Biden administration’s request for information to help the Commerce Department identify risks in the semiconductor supply chain, as requested by an executive order issued by President Joe Biden in February.
In calling for “immediate action” to address the current chip supply crisis, EMA urged the administration to give priority to automotive-grade semiconductors for medium- and heavy-duty truck components and aftermarket parts. “Truck manufacturers and components suppliers are struggling to procure semiconductors against higher-volume, non-essential industries,” constricting availability of new commercial vehicles and aftermarket repair parts, according to EMA.
Biden’s executive order called on the secretaries of commerce, transportation and other Cabinet departments to submit a report to the White House within 100 days that included policy recommendations and identified risks.
“In addition to the immediate semiconductor supply constraints, there is an important role for the U.S. government in addressing structural issues with the semiconductor supply chain to ensure long-term resiliency,” EMA stated. “It is critically important to ensure a sufficient supply of automotive grade semiconductors for medium- and heavy-duty trucks from a competitive global supply network, including the ability to source semiconductors from suppliers in the United States.”
Biden on Monday joined a virtual CEO Summit on Semiconductor and Supply Chain Resilience to comment on strengthening domestic semiconductor supply chains.
His recent 2022 discretionary budget request included doubling — to $442 million — the amount devoted to supply chain security overseen by the Commerce Department. That includes $150 million to fund two new Manufacturing Innovation Institutes, “one of which is aimed at restoring the United States as a global leader in the design and manufacture of semiconductors,” according to the request.
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