UPDATE: March 24, 2020: Ford is not planning to restart North American production on March 30 as originally planned, the company announced Tuesday. It did not provide a new date for when its factories would open again, saying it is working "on the optimal timing for resuming vehicle production, keeping the well-being of our workforce top of mind."
UPDATE: March 18, 2020: Ford, General Motors and FCA Group will temporarily stop production at all North American factory locations. Ford said the stoppage would start after Thursday evening shifts end, and last until March 30, the company announced Wednesday. GM similarly said the halt would last until March 30, but the exact start of the stoppage will vary by location, according to a press release. FCA's stoppage began Wednesday and will last "through the end of March."
"UAW and Ford leaders will work together in the coming weeks on plant restart plans as well as exploring additional protocols and procedures for helping prevent the spread of the virus. Chief among them: finding ways to maximize social distancing among plant workers – both during work hours and at shift change, when large numbers of people typically gather at entry and exit points and maximizing cleaning times between shift changes," Ford said in the announcement.
Dive Brief:
- Ford, Volkswagen and Fiat Chrysler Automobiles are among the companies that have decided to temporarily shut down manufacturing facilities across Europe in recent days as a result of the COVID-19 outbreak and response. Tesla is among the U.S. manufacturers that have also suspended production.
- "Component supplies to Ford manufacturing sites in Europe have been increasingly interrupted, while sales of vehicles across the industry have declined with dealerships required to temporarily close their sales operations in some countries," Ford said in a release explaining its reason for suspending production "for a number of weeks" across continental Europe.
- Fiat, which has stopped production in Italy, Serbia and Poland, is working with its supplier base and other partners to ensure it can deliver the originally planned production levels once operations are back to normal, the company said in a release emailed to Supply Chain Dive.
Dive Insight:
Factory shutdowns will quickly ripple through the supply chain to impact the suppliers, logistics partners and other businesses that work with manufacturers on a regular basis, especially for just-in-time manufacturing operations like automotive supply chains.
"In the automotive sector, planned factory shutdowns for two weeks have already caused similar production halts at supplier levels as well, in particular at Tier-1 levels," Mirko Woitzik, the manager of EMEA risk intelligence at Resilience360, told Supply Chain Dive in an email. "This could then lead to temporary layoffs or even insolvency."
Manufacturing shutdowns are beginning to show up in the U.S. as well. Ford temporarily closed an assembly plant in Chicago due to supply shortages resulting from another temporary shutdown at one of its suppliers, Lear Corp, after employees there tested positive for COVID-19, an illness in the coronavirus family, according to The Wall Street Journal.
The United Auto Workers had been pushing the big three automakers to shut down production in the U.S. for two weeks, but the two sides reached a deal that keeps factories open while putting in place more protections for workers, according to WXYZ Detroit.
Officials in Alameda County California told Tesla it would not be able to continue normal operations at its manufacturing operation. Tesla "is not an essential business as defined in the Alameda County Health Order," the county Sheriff tweeted Tuesday."Tesla can maintain minimum basic operations per the Alameda County Health Order."
Automotive suppliers were one industry listed as having a "high exposure" to the outbreak in an analysis by Moody's. Many of the automotive manufacturers are in a good place financially to be able to weather the outbreak, but the same can't be said for many of their suppliers, the financial services company noted. Other high exposure industries included passenger airlines, apparel, gaming, lodging and leisure, and transportation, according to a note emailed to Supply Chain Dive.
As factories across Europe and North America stop production or put in place measures to keep operations going, factories across China are coming back online after an extended shutdown to start the year.
"In contrast," Volkswagen CEO Herbert Diess said in a statement outlining the company's shutdowns across Europe, "production in China has been resumed with the exception of the factories in Changsha and Urumqi."
