MEMA presses Congress to pass competition bill

WASHINGTON — As the auto industry endures global supply chain disruptions, including a semiconductor shortage that emerged from the COVID-19 pandemic, one trade association is hoping to avoid déjà vu.

“Right now, our No. 1 public policy issue is to get passage of the competition bill that is making its way through Congress,” said Ann Wilson, senior vice president of government affairs at the Motor & Equipment Manufacturers Association, which represents original equipment and aftermarket automotive parts suppliers in the U.S.

Congress this month held its first meeting of the conference committee, which is tasked with negotiating a final competitiveness bill approved by both chambers. The Senate passed its version of the bill in June 2021, followed by the House passing a similar bill in February. Major focuses of both bills are improving U.S. competitiveness with China and boosting semiconductor manufacturing.

Both versions also include $52 billion to strengthen domestic semiconductor production and research — a key provision supported by major industry groups, including MEMA.

The association is pressing Congress to pass the bipartisan innovation and competition bill by July 4.

“That’s not the only thing that we talk to members of Congress about,” she said, “but it is by far the most important thing to us to pass this year.”

Wilson, 67, sat down with Reporter Audrey LaForest at MEMA’s Washington office to discuss the association’s recent advocacy efforts. Here are edited excerpts.

Q: MEMA’s first monthlong “Spring into Advocacy” event is underway. You mentioned the competition bill. What else are you discussing?

A: The impact the supply chain crisis has had on the whole industry. One of the things that gets lost in the discussions is the impact that this has had on some of our smaller suppliers, the Tier 2s and Tier 3s. When an OEM is forced to reduce production — whether they slow down production or they close a shift — and then the Tier 1s make changes to their own production schedules, what that does to the Tier 2s and Tier 3s is they have to do the same, but they don’t usually have as much room to pivot. At the same time, when production ramps back up, they have to be ready to jump-start that production, and this has added an immense amount of strain to these smaller suppliers.

What has been an “advocacy win” during the Biden administration? Any concerns?

There are a lot of things the Biden administration is doing well. They have really tried to be the leader on pushing for the CHIPS [Act] funding. [Commerce Secretary Gina] Raimondo, particularly, has been really good about working with our members and trying to understand how they can support it, and the White House has been really good about doing the same thing. They understand what’s going on at the ports. They understand the dilemma that this is putting domestic manufacturing in altogether. That’s been a really strong point of our work with the administration. We’re continuing to work with them on the issue of work force for the future and how we retrain and upskill workers for this transition that we are all going through. That’s a very difficult issue because a lot of that training happens at the local level.

Our members are very interested to see how the Biden administration works on their view toward zero-emission vehicles. As we move to 2030, we are hopeful that they allow a range of technologies to be considered zero-emission and don’t just focus on battery-electric vehicles.

I do think there are more conversations that we need to have, or we would welcome having, with the Biden administration on trade. Our members are committed to reshoring and nearshoring jobs, manufacturing, into the U.S. and in North America generally. But there are going to be some components that are not going to be made in the U.S. We’d like to see a conversation where we talk about how we improve U.S. jobs at the same time as how do we improve our ability to compete internationally.

What about the upcoming midterm election and the industry’s electrification plans?

Many of our members understand a couple of things; one is the investments that the vehicle manufacturers are making for electrification. This is a different conversation than it was four or five years ago, and the real pressure that’s on them to come up with plans, for those plans to be significant and for those plans to be successful. If the federal government decided to take a different tack, I think that they will find that the business community is saying, “We are making investments that we need to make sure that we see the end of.” We might see a change in the curve, but I don’t think we would see a reversal of the whole plan.

Has MEMA spoken to Sen. Joe Manchin, the West Virginia Democrat?

We talk to Sen. Manchin’s office all the time. I think people would be surprised with the number of things that we agree on. We did not take a position on the EV tax credits that were in Build Back Better. We have members who have customers that are union facilities. We have members who have customers that are not union facilities. As we move forward, part of the challenges are going to be where do we get the rare earths and the raw materials that are going to be necessary? We’re going to have to embrace Canada and other places to be able to do this, and I think we want to make sure that we’re working with as many of our partners as possible moving forward, and that may necessitate taking another look at that EV tax credit, but as a trade association, we have not taken a position on it.

Vehicle emissions and fuel economy standards have gotten stricter under Biden. How does that affect your members?

We’ve been fairly supportive of the pre-2026 standards and the changes that the Biden administration made. I think now, as we look at 2027 and forward, is really where some difficult new challenges and road maps need to be laid out. Our members on the light-vehicle side, particularly, have really expressed a desire for the Biden administration, or for any administration, to allow for a range of technologies to help with some of these standards.

The other thing is what do we do to get the supplier industry ready to make this pivot? What do you do to make sure that suppliers who are manufacturing something for the internal combustion engine have a plan for continuing manufacturing? I think what you see from the largest suppliers is they are, in many ways, ready to make a transition. The question is how fast? And if there are those underlying investments from the federal government for charging stations and manufacturing and retooling, you’ll see a lot of the largest suppliers ready to work with their customers to make this leap. But it’s bringing that whole supply chain along. If we haven’t learned anything over the last few years, we need to learn that the fragility of a supply base is real — whether it’s baby formula, wire harnesses in Europe, semiconductors — and we need to think about the consequences of this. Just like we don’t want to leave any consumers behind, we don’t want to leave work force behind either.