Intel, GM Investing Big Time In US Manufacturing, What Was That About Biden's Terrible Economy?

More chips! And maybe some salsa.

The Biden-Harris administration took a moment last week to tout a great big investment in US manufacturing by the Intel corporation, which plans to spend some $20 billion to build the world's largest semiconductor factory in New Albany, Ohio, a suburb of the state capital, Columbus. The White House statement said the deal reflects its commitment to reenergizing US manufacturing, particularly in solving the computer chip shortage that has hindered the recovery from the pandemic recession and contributed to inflation. (The statement points out that a full third of the annual increase in inflation last year was due to higher car prices, which were driven by the lack of microchips that go into everydamnthing in modern cars.)

The Ohio Intel plant will create 7,000 construction jobs, plus 3,000 permanent jobs at Intel. It also helps that Ohio Gov. Mike DeWine sweetened the deal by passing special tax cuts for "megaproject" job creators; the Columbus Dispatch says DeWine hasn't shared many specifics about other incentives that may have enticed Intel to Ohio.

President Joe Biden is also urging Congress to pass legislation to strengthen US research and development, in semiconductors and other parts of the supply chain, specifically, the "US Innovation and Competition Act," which passed in the Senate last June but is currently still being discussed in a House-Senate conference committee. It's expected to get a vote soonish.

Also too, the statement noted the US semiconductor industry has announced some $80 billion in new investments since 2021, to run through 2025, according to the Semiconductor Industry Association. As CNET notes, those jobs won't just pop into existence overnight, since it takes time to build plants and ramp up production. Microchip manufacturers have been going full tilt since last year to meet demand.

Plus, it's hard to get those tiny little orchestra leaders attached to the silicon wafers.

The microchip shortage is related to the pandemic in several ways; the economic recession meant less demand worldwide, even as available chips were being hoovered up by manufacturers of computers, tablets, and cameras to meet the needs of people working from home. The collapse of the new car market led car manufacturers to cancel orders of new chips, but then when the auto industry realized demand was returning, "chip plants had allocated their capacity to other customers."

That meant that even though automakers wanted to build lots more cars, the chips weren't there, and boom, inflation due to far more demand than there was supply. It's expected the chip shortage may start easing by the end of this summer, but some companies anticipate supply chain issues even into 2023. Add in not enough containers to ship stuff around the world, not enough workers to unload all the containers in port, not enough drivers from there, and other kinks in the supply chain, and you get quite the mess, which is finally beginning to ease.

More good manufacturing news from the New York Times:  General Motors announced yesterday it's going to spend $7 billion to build out new electric vehicle capacity, on top of other projects it had previously announced. The new investments will go to build a new battery plant in Michigan, and to revamp an existing factory near Detroit that will build electric pickups, with production expected to start in 2024. Those two projects are expected to create 4,000 jobs, the company said.

The Times reports things are really bustling in the auto industry as it prepares to move to building only electric vehicles in the fairly near future:

In December, Toyota said it planned to build a battery plant in North Carolina that is expected to employ 1,750 people.

Ford Motor has already overhauled a plant in Dearborn, Mich., and is set to begin making an electric version of its F-150 pickup this spring. Ford also plans to spend $11.4 billion tobuild two battery plants in Kentucky and a third battery plant and an electric-truck plant in Tennessee.

In addition to the new investments announced yesterday, GM, which plans to phase out gas-powered vehicles by 2035, is building its own new battery factories in Ohio and Tennessee. It has also converted a plant in Detroit to build the ridiculously large Hummer EV, which will be every bit as showy and unnecessary (and as popular with rich fuckwads) as its earlier diesel SUVs, minus the contributions to global warming. Hey, if supplying rich assholes with literal vehicles of conspicuous consumption helps get America off the fossil fuel teat, bring on the humming Hummers.

Also, this bit of industry insider info from the Times:  One reason Ford is getting itskickass F-150 Lightning electric truck to market several months ahead of GM's Chevy Silverado / GMC Sierra pickup is that Ford is buying its battery packs from an outside supplier while it builds its own battery production plants.

GM is instead taking time "to develop its own modular battery packs that it believes will provide a cost advantage over competitors in the long run." GM is partnering with LG Electric to build the battery packs. GM plans to be able to turn out 600,000 electric pickups at two factories, and by the end of 2025, to be able to build a total of a million EVs a year.

Honestly, we'd like to see Joe Biden and Kamala Harris making much more noise about all this. Hell, before he took office, Donald Trump managed to sell himself as the savior of American Jobs at that Carrier plant in Indiana, even though that company ended up laying off the workers anyway.

Perhaps if Biden cussed at Fox News more, while tooling around the White House grounds in a prototype electric pickup ...

[ White House / CNET / Columbus Dispatch / NYT ]

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