U.S. Automakers Respond to the Coronavirus Pandemic

  • Friday 27th March 2020

In the course of just a few short weeks, the coronavirus (COVID-19) has had a devastating effect on daily life in America, as well as each of the automakers that builds cars here. Tens of thousands have been infected, hundreds have died, many are unemployed or furloughed, and most of us have been advised to stay at home except for occasional runs for essentials like groceries and medications.

In this post we’ll take a look at what actions US automakers are taking in response to the constantly evolving coronavirus situation and how these actions are affecting the millions of people earning a paycheck directly or indirectly from companies like General Motors (GM) and Ford.

Plant Closures: US Automakers

Due to the rapid spread of the coronavirus and growing concern from employees, GM, Ford, and Fiat Chrysler Automobiles (FCA) formed an agreement on March 17 to throttle down production while also focusing on Centers for Disease Control and Prevention (CDC) guidelines, such as providing 6 feet of distance between workers, increasing the frequency of workplace cleaning, and allowing eligible employees to work from home. That plan was scrapped just one day later; on March 18, the three companies, often collectively referred to as the Detroit 3, announced they would suspend production at all their U.S. production facilities until March 30. Since then, Ford has reported that it will monitor developments daily but delay reopening its plants. GM has also shuttered operations indefinitely, while FCA has informed the UAW that it now tentatively plans to restart operations on April 14. Tesla shut down its California factory March 23 with a restart date to be determined and drastically reduced production at its Nevada plant.

Plant Closures: Foreign Automakers

Several other car companies also build vehicles in the US. Toyota, with factories in Texas and other states, planned to close between March 23 and 25 to deep-clean all workspaces, but later revised that to a complete shutdown until April 20. Honda, which has factories in Ohio and elsewhere, stopped production on March 23 with hopes of restarting April 7. Nissan, with a large manufacturing presence in Tennessee, sent workers home on March 20 and, like others, plans to get things rolling again April 7.

Some folks may not know that Hyundai and Kia build some of their vehicles here in the US, specifically in the states of Alabama and Georgia. Those plants were closed on March 18 and March 30, respectively, and are due to reopen April 13. Volvo has a relatively small production setup in South Carolina, which closed March 19 and isn’t due to go back online until April 14. Mercedes-Benz, another player with plants in the southeast, has sent its workers home until at least April 6. BMW, Volkswagen, and Subaru all put a halt to their US production on March 29. BMW expects to resume production at its South Carolina plant on April 13, Volkswagen plans to reopen its Tennessee facilities on April 6, and Subaru has set April 7 as the date it will begin building cars once again at its factory in Indiana.

Assisting Employees and Communities

In an effort to support people affected by the coronavirus, automakers are taking various approaches to help. GM, for example, is offering $1 million in grants to non-profit organizations in areas where it operates, and Hyundai is donating $2 million to children’s hospitals.

To assist employees through this difficult time, Honda announced it would provide full pay during its shutdown, which is expected to last until April 7. For companies with UAW contracts, workers will receive a combination of union and unemployment benefits.

Supplying Critical Equipment

Perhaps most significant is the role automakers can play in the development, production, and distribution of scarce medical equipment that will be needed as the coronavirus spreads.

President Trump activated the Defense Production Act and on March 27 officially ordered GM to start building ventilators. GM had already announced that it would assist Ventec Life Systems increase production of much-needed ventilators. In fact, GM was in the process of retrofitting its Kokoma, Indiana, plant to build up to 20,000 machines per month, with the first deliveries expected in late April. In total, the collaboration is expected to deliver 200,000 ventilators. GM is also preparing to produce hundreds of thousands of face masks at a facility in Warren, Michigan. FCA and Toyota are contributing in a similar fashion, as both companies prepare to make plastic face shields for use by health professionals.

Ford is stepping up to the plate with its own plans. In addition to providing face shields, the company, in partnership with 3M and General Electric (GE), is using some innovative engineering solutions to address shortages. Among them, a fan used to cool F-150 seats has been repurposed for use in an air-purifying respirator, and 3D printers are being transitioned away from building car parts to creating components for medical equipment. And, like GM, Ford is working with an outside company to expand the production of ventilators.

Tesla is another carmaker looking at ways it can use its production capacity to help. In the meantime, the company purchased and donated 1,200 ventilators to the state of California and has pledged to provide hundreds more to New York.

Everything Is Subject to Change

If there’s one thing we’ve all learned about life with the coronavirus, it’s that plans and forecasts are fluid and may be better described as hopes and guesses. The automakers, many of which operate in states closed to all “non-essential” businesses for at least the next couple of weeks, may not have the power to determine when their plants will reopen. On the other hand, conditions may improve, with switches turned on and people back to work sooner than anticipated. Time will tell.

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