US auto plants get back to work after Covid-19 halts

Moody's last week slashed its outlook for 2020 US auto sales to a decline of 25 percent from the prior 15 percent projected drop.

Two months after effectively freezing American auto manufacturing, Detroit’s “Big Three” on Monday began to get back to business with masks, temperature checks and social distancing protocols to try to prevent coronavirus outbreaks.

Some hourly workers have expressed concerns about the risks of assembly line activity, where staff traditionally have worked side-by-side. But automakers say they will be able to work while practicing social distancing and taking other measures to protect workers.

The resumption brings a burst of fresh economic activity across states in the midwestern United States, a key swing area in the upcoming elections.

President Donald Trump is set to visit a Ford plant in Michigan later this week that has been building ventilators and other medical equipment during the pandemic.

The relaunch also comes as the US economy continues to bleed millions of jobs in the wake of coronavirus shutdowns that have dimmed expectations for auto sales in 2020, although industry analysts have seen signs of a recovery in recent weeks.

The Big Three closed down in mid-March under heavy pressure from union officials following outbreaks at some facilities.

United Auto Workers spokesman Brian Rothenberg said the labor organization was closely monitoring the situation.

“It’s still early but I haven’t heard of major incidents, and staffing appears to be at or above estimates as people go through protocols,” Rothenberg said.

Art Wheaton, a labor expert at Cornell University, said the reopening of car plants is “important for the economy, tax revenue, auto companies and stability of the workforce,” but added that some workers are anxious given the danger of the virus.

“There are thousands of people anxious to get back to work and thousands a bit concerned,” Wheaton said. “It is always a matter of balancing the risk versus reward.”

General Motors gave workers a flyer that pledged to “monitor the situation, adapt accordingly and make any changes to policy in accordance with the CDC/WHO-recommended employee safety practices.”

As they reported to work at plants manufacturing Chevrolet, GMC and other models, GM took the temperature of employees and provided facemasks and other personal protective equipment, company spokesman Jim Cain said.

Automakers have disinfected work stations, revamped spaces, staggered shift times and installed soap and cleaning equipment throughout the factories.

GM Chief Executive Mary Barra said earlier this month that the company would resume production “in a very cadenced and thoughtful way,” with just one shift before adding more.

Ford set return-to-work dates for several plants for the week of May 18, while listing a few factories that would not resume until the week of May 25.

Ford Chief Executive Jim Hackett said that the company’s confidence in the restart stemmed from the success of operations in Europe and Thailand, where workers have been brought back without sparking Covid-19 outbreaks.

“We have not found an infection in any of those factories,” Hackett told NPR.

Hackett said the coronavirus crisis had forced a rethink of plant operations.

“Prior to Covid, we would put more than one person in a vehicle as it was moving down the line as they were adding items,” Hackett said. “We’ve rechoreographed that so it’s not going to happen.”

Analysts warn production levels will be lower, at least at first, due to the social distancing measures as well as the hit to global supply chains.

Companies may have trouble importing parts from countries still impacted by the coronavirus, or from the resulting backlog once things open.

“The new normal may be a lower volume than we did before,” said Charlie Chesbrough, a senior economist at Cox Automotive, pointing to backlogs at Chinese ports.

Moody’s last week slashed its outlook for 2020 US auto sales to a decline of 25 percent from the prior 15 percent projected drop.

US car sales data from the last few weeks, while still weak, has improved significantly from late March, said Chesbrough. Even in a broadly weak market, US consumers could have trouble this summer finding popular truck and sport utility vehicles due to limited production.

“There may be only white vehicles out there, or not the right trim level,” Chesbrough said, adding that Covid-19 hit both auto supply and demand.

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