Clarence E. Brown has skilled union strikes, plant shutdowns and layoffs as a result of components shortages throughout his 47 years working for General Motors.

But Brown, president of a United Auto Workers native chapter in Kansas, describes the ongoing semiconductor chip shortage that is costing automakers billions and forcing large momentary layoffs as extra “disappointing” than earlier work stoppages as a result of he feels it may have been averted.

“I’m not a company multibillionaire, but it surely does not take a rocket scientist to know that there is one thing incorrect with this,” he advised CNBC. “I’ve been with General Motors for over 40 some years, and in all 40 some years, they’ve taught me one factor: Where is ‘Plan B’? If ‘A’ just isn’t working, the place is ‘Plan B?’ Something must be carried out so this may by no means occur once more.”

The White House is holding a virtual CEO Summit at midday Monday the place President Joe Biden is scheduled to fulfill with executives from the auto, tech, biotech and client electronics industries to debate the chip shortage, together with CEOs Mary Barra of GM, Jim Farley of Ford Motor and Pat Gelsinger of Intel.

Auto executives began warning of a chip shortage late final yr. Those warnings shortly become momentary plant closures for the auto industry, inflicting automakers to briefly layoff tens of 1000’s of U.S. auto staff for various durations of time since the starting of the yr. Brown’s roughly 2,000 hourly staff at GM’s Fairfax Assembly plant have been amongst the first to lose work when the manufacturing facility was idled by GM in early February as a result of the components shortage.

“I simply hope that these individuals in cost, together with the president, can come up with a plan in order that this may not occur once more,” mentioned Brown, who met Biden throughout a marketing campaign go to to the plant in 2019. “It’s not only a General Motors or Ford or automotive factor. This has affected different areas of this nation as properly.”

But consultants and firm officers say there’s little to nothing Biden can do to pressure chip makers, a majority of which are in Asia, particularly Taiwan, to allocate extra to the U.S. automotive industry. Biden may attempt to strain them; he is additionally backed proposals for tax incentives to U.S. producers to make the essential components in America to keep away from shortages in the future. 

“One of our hopes can be that we may come out of the assembly with a path and a roadmap to getting again to fulfilling 100% of automotive semiconductor orders and have some actual perception and transparency into what that timeline would possibly appear to be,” Matt Blunt, president of the American Automotive Policy Council, which represents GM, Ford and Stellantis NV in Washington, advised CNBC.

Blunt, the former governor of Missouri, mentioned producing extra semiconductors domestically is a bipartisan problem as a result of the “important affect the auto industry has on the U.S. economic system and the important damaging implications of this semiconductor shortage.”

Consulting agency AlixPartners expects the shortage will value the world auto industry at least $60.6 billion in 2021.

Under Biden’s $2 trillion infrastructure proposal unveiled earlier this month, $50 billion was for the American semiconductor industry. On Feb. 24, he additionally ordered a 100-day review of U.S. provide chains for superior batteries, prescription drugs, essential minerals and semiconductors.

Currently, solely about 12% of semiconductors, which have extraordinarily lengthy manufacturing schedule and transport occasions as a result of the quantity of supplies and components utilized in the chips, are produced in the U.S., in response to officers.

Semiconductors are key components in automotive utilized in infotainment, energy steering and braking techniques, amongst different issues. As a number of crops shuttered final yr as a result of Covid, suppliers directed semiconductors away from automakers to different industries, making a shortage after client demand snapped again stronger than anticipated. The components can include a number of completely different sizes and varieties of chips.

Tom Quillin, Intel senior director for safety and belief coverage, final week mentioned the tech big “sees America at a essential inflection level” relating to semiconductor manufacturing — not only for automotive, however for the know-how industry as properly.

“How the U.S. authorities invests in the semiconductor industry possible will decide the way forward for home know-how innovation and U.S. world management,” he mentioned throughout the digital dialogue Thursday on the CHIPS for America Act hosted by  the U.S. Department of Commerce’s bureau of industry and safety, workplace of know-how analysis.

The three-hour discussion board included tech executives as properly as leaders from smaller firms and coverage teams, together with Blunt and John Bozzella, CEO of the Alliance for Automotive Innovation that represents the overwhelming majority of automakers with operations in the U.S.

Bozzella urged the Biden administration to undertake insurance policies that encourage U.S. producers to construct semiconductors in the U.S., together with a funding tax credit score that might “assist firms offset the value of making new strains inside current amenities or reallocating present manufacturing to fulfill evolving wants.”

Automakers have been prioritizing meeting of extra worthwhile automobiles such as full-size pickups by chopping manufacturing of vehicles and crossovers. The Detroit automakers are even partially constructing pickups to finish and ship at a later date.

The shortage has triggered important worth and demand will increase in 2021, in response to Smith, a Houston-based impartial distributor of digital elements. Some open market costs have risen 5 to 20 occasions increased this yr, in response to the firm.

“Automotive semiconductor demand has been on a gradual rise since the starting of the yr,” Marc Barnhill, Smith’s chief buying and selling officer, mentioned in an emailed assertion. “Smith’s market intelligence information now factors to even additional exacerbation of lead time and demand will increase. There has by no means been an automotive semiconductor shortage fairly like this, and it is not near being over.”

GM expects the downside will scale back its working revenue by $1.5 billion to $2 billion this yr, whereas Ford mentioned the situation may decrease its earnings by $1 billion to $2.5 billion in 2021.

The monetary affect of the shortage is not misplaced on Brown, president of the UAW Local 31 in Kansas. But his members, like many manufacturing staff, simply need to get again to work constructing the Chevrolet Malibu and Cadillac XT4 for GM.

“At this native, we’ve caught collectively throughout the troublesome occasions and we’re sticking collectively now,” he mentioned.  “I simply hope and pray that the shortage is over as quickly as attainable … and I’d prefer to suppose after this we’ve extra of these jobs in the United States to verify if one thing occurs, we’ll be capable of cowl ourselves.”

 – CNBC’s Michael Bloom contributed to this report.