Well, we sure didn’t see this coming-not. GM, Ford, and Fiat Chrysler will be shutting down their assembly lines in the US, Mexico, and Canada. This will continue until at least March 30. This dramatic turn is a result of the continuing coronavirus crisis. Concern about exposure and spreading the virus to assembly line workers means GM will begin shutting down operations today. In the case of both Chrysler and Ford, they’ll be shutting down tomorrow.
Just last night the Detroit three were going to continue production
Just last night the manufacturers met with UAW personnel and factory leaders. They decided to take extra safety steps and continue working today. The plan was to conduct partial shutdowns and take more time between shifts for cleaning. But this morning a worker at the Ram truck plant in suburban Detroit was diagnosed with the coronavirus. Then, soon after another confirmation came from Ford’s Ranger plant. The Ford Explorer plant in Chicago is also being closed because a seat supplier closed its plant when a worker there tested positive for coronavirus.
Honda’s nonunion manufacturing plants in the US had just agreed to a six-day stoppage. So, it has been a cascading set of events that spelled out the eventuality of most plants closing either from direct or indirect consequences of the virus.
“Extraordinary precautions around the world,” GM CEO Mary Barra
“In these unprecedented times we’re exploring unique and creative solutions to support our workforce, customers, dealers, suppliers, and communities,” said Ford president Kumar Galhorta. “We have agreed to a systematic, orderly suspension of production to aid in fighting COVID-19/coronavirus,” said GM CEO Mary Barra. “We have been taking extraordinary precautions around the world to keep our plant environments safe. Recent developments in North America make it clear this is the right thing to do now.”
Ford’s parts distribution warehouses will stay open for the time being to continue supplying components to customers. In the US Ford’s employees with a year or more seniority receive about 75% pay. This is based on unemployment and supplemental benefits. Those with less than one year’s seniority are eligible for unemployment.
Tesla has been in the news recently for being deemed an “essential business”
The move today opens the door for other manufacturing plants in the US to follow suit. Tesla has been in the news recently for being deemed an ”essential business” by Alameda County in northern California. When a spokesman for the county was asked what is essential about car manufacturing during a pandemic he replied, “That’s a good question.” Really? He promised a response at some point.
Meanwhile, Tesla CEO Elon Musk told employees earlier this week that operations would continue. Tesla is in the midst of cranking out its new Model Y. While initial production wasn’t to happen until fall Musk stepped up production to now. This is not an especially good time for them to be shutting down assembly but what time ever is? Still, he said in a statement, “If you feel the slightest bit ill or even uncomfortable please do not feel obligated to come to work.”
There are vehicle manufacturing facilities throughout the midwest and south. The closures of the Detroit three plants will probably have a domino effect on the rest of the industry. Unfortunately, the ramifications of this will have consequences for years to come.
UPDATE: We have just learned that Toyota and Hyundai have also stopped vehicle production in the US.