Major US Automakers To Close Factories Due to Coronavirus
As government orders to restrict activity choke off much of everyday life, America’s automakers will be shutting down until the vehicle market returns to normal.
Ford, General Motors and Fiat Chrysler will all be shutting down their U.S.-based factories this week, according to CNBC. The closures will last through March 30, at least.
Honda is closing four of its U.S. plants as of Monday for six days.
“GM and the [United Auto Workers union] have always put the health and safety of the people entering GM plants first,” GM CEO Mary Barra said in a statement, according to the Detroit Free Press. “We have been taking extraordinary precautions around the world to keep our plant environments safe and recent developments in North America make it clear this is the right thing to do now.”
“We’re continuing to work closely with union leaders, especially the United Auto Workers, to find ways to help keep our workforce healthy and safe — even as we look at solutions for continuing to provide the vehicles customers really want and need,” Kumar Galhotra, president of Ford North America, said.
Ford also said it would put additional steps in place to limit the spread of the coronavirus.
The automaker closed one Michigan-based assembly plant after an employee tested positive for the virus.
Ford said workers with a year of service or more will earn 75 percent of their wages through a combination of payments from the company and unemployment benefits, according to The New York Times.
“UAW members, their families and our communities will benefit from today’s announcement with the certainty that we are doing all that we can to protect our health and safety during this pandemic,” UAW President Rory Gamble said.
“This will give us time to review best practices and to prevent the spread of this disease.”
RBC Capital Markets said global auto production could drop 16 percent in 2020, with U.S. sales expected to fall 20 percent.
“The greater challenge is that once the country gets past the worst of the pandemic, automakers will need to be prepared to get back online quickly to capitalize on the wave of deferred consumer demand,” Jessica Caldwell, Edmunds’ executive director of industry analysis, told CNBC.
Collectively, the actions will shutter 25 factories and affect 150,000 union workers.
James Hudson, a Fiat Chrysler pipefitter, said the action was the right step.
“The air in here has been eerie. You could feel it when come into the plant. Nobody’s talking even on their breaks, they’re sitting at tables by themselves. You can tell there’s a lot of anxiety,” he told the Free Press. “I think the Big Three could’ve done this before now. It’s easy to say we’re looking out for our people but another thing to show it.”
Hudson said in a plant where there were 1,700 or 1,800 people on each shift, it was like working in “a big city.”
“For those of us taking things seriously, I feel like we’re being put in harm’s way,” he said.
“Now they’re telling everybody to go home and be safe. And that’s great.”
The action reflects the drop in consumer demand for vehicles at a time when battling the virus is sending ripples through the economy.
“We had four customers cancel deliveries because of the virus,” Wes Lutz, an auto dealer who owns Extreme Dodge in Jackson, Michigan, told The Times.
“They are afraid they will lose their jobs.”
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