Imperialist Semiconductor Shortage Halts Car Production, Temp Workers Bear Burden

By AJ Peters

A capitalist-caused shortage of computer chips has forced automakers across the world to halt production, driving up car prices and leaving many workers unemployed. In Kansas City, both Ford and GM factories have completely shut down. Both companies have laid off all of their temporary workers, and Missouri’s unemployment system is preventing many of these workers from receiving benefits by imposing ten-day waiting periods, requiring workers to verify their identity in person at unemployment offices, and denying claims based on false accusations from the state.

The precarious situation of temporary autoworkers is a result of the auto industry’s drive for profit, which led them to adopt “just-in-time manufacturing” (JIT) methods that cut costs by minimizing how many extra parts they stock. When supply chains are disrupted, assembly lines quickly grind to a halt, and workers’ livelihoods are jeopardized. Union autoworkers’ contracts at Ford guarantee them 90% of their income when work isn’t available, but Ford’s 600 temp workers have no protections. JIT is also used in many other industries, which played a large part in the many shortages of essential goods during the pandemic.

Many industries are affected by the imperialists’ chip shortage, but the auto industry is more greatly affected. When the coronavirus pandemic began, companies like Ford reduced production, laid off temp workers, and canceled orders for chips. Despite the ongoing depression, the demand for cars increased significantly in 2020, and automakers hired more temps and increased production, but by then, chipmakers were already backlogged for months. The chips used in cars aren’t as profitable as chips for other in-demand products like phones or computers, and analysts predict the chip shortage in the auto industry may last into 2022 or even 2023.

The chip industry is highly monopolized, as a new semiconductor foundry costs $10 billion or more to build. 75% of production is concentrated in East Asia, and the competition between US and Chinese imperialism has also affected supply. The US has sanctioned Chinese manufacturers like Huawei, while US imperialists signal their readiness to defend Taiwan, home to chip monopoly Taiwan Semiconductor Manufacturing Company, Limited. In an interview with ruling class media, Pat Gelsinger, CEO of US chip monopoly Intel, said that a hypothetical invasion of Taiwan by China, “could force the US to defend Taiwan as we did Kuwait from the Iraqis 30 years ago. Then it was oil. Now it’s chips.”

The ruling class has responded by investing greater amounts into the chip industry to try to profit off of the shortage. Private investment in the industry is eight times higher than it was in 2016, and Biden proposed $50 billion to subsidize domestic chip manufacturing. Monopolies like Intel and TSMC are already spending hundreds of billions of dollars to build new factories. Like clockwork, they’ll keep producing more and more until the market is saturated – prices will drop, companies will cut production, and workers across interlinked industries will again be jobless due to the cycles of imperialist overproduction.

SUPPORT REVOLUTIONARY JOURNALISM

While you’re here, please consider donating so we can continue serving the people with our reporting!

Click to Donate