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Carmakers in a Quandary about When to Reopen Plants

It starts with worker safety, but there also is increasing uncertainty about demand
#FiatChryslerAutomobiles #Chrysler #Fiat


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Carmakers all agree on the importance of protecting their employees during the coronavirus pandemic.

But they certainly aren’t sure about what that means in terms of reopening their factories.

Defining “Safe”

Blame it on uncertainty about the trajectory of the outbreak. Not to mention the lack of definition of what will define safe conditions that justifies a widespread return to work by everyone, not just auto industry employees.

                                                          Getty Images

Ford is a case in point. The company originally planned to resume vehicle production in North America yesterday. Then it pushed that date back to April 6 for one plant in Mexico and to April 14 for several others in the U.S.

Now Ford says all bets are off, and it doesn’t know when any of its factories in the region will start up again. This comes after the company and United Auto Workers union confirmed a third COVID-19 fatality among Ford’s hourly workers in the U.S.

General Motors scrapped its original March 30 restart date and now is evaluating conditions week by week. It’s the same story for Fiat Chrysler Automobiles operations in North America.

Reality Sets In

These open-ended decisions reflect a growing understanding by all of us about the pace of the pandemic. Yes, we’d all like it to wind down tomorrow. But reality suggests it will be many months before the world gets ahead of the crisis.

In China, a bellwether for the ebb and flow of the coronavirus emergency, some carmakers are beginning to return to reasonably normal operations.

But producers in Europe, where the pandemic struck next, remain uncertain about when to reactivate plants. The industry shut down only two weeks ago. As in the U.S., producers there hoped to resume at least some production as soon as this week. Now they are reevaluating.

The Sales Issue

The real issue isn’t when auto industry employees return to work. It’s when everyone else can do the same. Right now, buying a car is hardly top of mind for consumers in places where the pandemic has taken hold.

Even in China, there are mixed signals about the speed at which demand for new cars will revive. Reuters reports that the central government is mulling an array of stimulus measures to get the market moving again.

The same questions about incentives will be raised in Europe, and then the U.S., when those regions begin to emerge from the health crisis. But we’re all beginning to recognize it won’t be tomorrow.

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