{"id":146053,"date":"2020-04-16T14:54:18","date_gmt":"2020-04-16T18:54:18","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=146053"},"modified":"2020-04-16T15:19:44","modified_gmt":"2020-04-16T19:19:44","slug":"automakers-pressed-to-reopen-plants-but-face-major-obstacles","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2020\/04\/automakers-pressed-to-reopen-plants-but-face-major-obstacles\/","title":{"rendered":"Automakers Pressed to Reopen Plants, But Face Major Obstacles"},"content":{"rendered":"
\"\"<\/a>
Volkswagen’s Chattanooga plant has been silent for some time due to the pandemic.<\/figcaption><\/figure>\n

It\u2019s been more than a month since the last Atlas sport-utility vehicle rolled out of the Volkswagen assembly plant in Chattanooga, Tennessee, but the automaker hopes to have the line begin moving again sometime during the week of April 27th, part of a \u201cphased restart of production\u201d of its global manufacturing system.<\/p>\n

VW is a bit more ambitious than most of its rivals who are largely waiting until early to mid-May to kickstart their own U.S. assembly operations. But it\u2019s clear the manufacturers want to get things back up and running as soon as possible. The industry\u2019s business model means they make their money once a car is shipped to a dealer, rather than when it is sold to a retail or fleet customer.<\/p>\n

Automakers aren\u2019t the only ones hoping to get assembly lines running again. As he makes clear seemingly every night, President Donald Trump is desperate to get the economy in rebuild mode and, considering that millions of American jobs are linked to the auto industry, it would be a critical force \u2013 as was the case when the U.S. emerged from the Great Recession.<\/p>\n

<\/p>\n

(U.S. car sales tumble sharply \u2013 but not as bad as originally feared.)<\/strong><\/span><\/em><\/a><\/p>\n

Trump held a conference call with senior executives from both Detroit\u2019s Big Three automakers and California-based Tesla on Wednesday to encourage them to fire things back up.<\/p>\n

\"\"<\/a>
President Donald Trump is pressuring automakers to reopen plants soon.<\/figcaption><\/figure>\n

While company officials say that is a top goal, they are quick to stress their number one priority will be to ensure that workers who return to their plants aren\u2019t going to be infected by the coronavirus. Hundreds reportedly already were by the time the industry ground to a halt in mid-March, with a number of those stricken by COVID-19 having so far died.<\/p>\n

The three Detroit manufacturers actually are operating a handful of plants already, facilities like GM\u2019s electronics component operation in Kokomo, Indiana, and a Ford factory in Flat Rock, Michigan, converted to produce critically needed medical equipment. They\u2019re being staffed by union volunteers and the carmakers claim to have taken extreme steps to ensure worker safety.<\/p>\n

They\u2019re planning to take many of the same steps to reduce risks when car production resumes, according to Jim Baumbick, vice president, Ford Enterprise Product Line Management. But that creates a number of challenges and will likely mean that production rates will be significantly slower than before the pandemic outbreak when factories building high-demand products like the Ford F-Series pickup were rolling out a new vehicle roughly every 50 to 60 seconds on a nearly 24\/7 schedule.<\/p>\n

\u201cThey recognize the risk\u201d of what would happen if there are further outbreaks that could again shut down plants, said Doug Betts, a former Chrysler executive who now runs the automotive division for J.D. Power.<\/p>\n

\"\"<\/a>
The Rouge plant produces a new F-Series pickup, on average, every 53 seconds.<\/figcaption><\/figure>\n

(Pandemic will have \u201ca permanent effect\u201d on auto industry.)<\/a><\/strong><\/em><\/span><\/p>\n

Even if the automakers can keep the virus out of their plants, that doesn\u2019t ensure things will go smoothly, Betts and other experts have been warning.<\/p>\n

Few businesses are as complicated as manufacturing automobiles which typically require thousands of parts sourced from hundreds of suppliers. Even on the parts side, suppliers are organized into different tiers and a kink in the chain caused by one of the most insignificant players can have far-reaching effects. Several years ago, a fire at a supplier plant producing magnesium beams forced Ford to put production of those aforementioned F-Series pickups on hold for weeks, until an alternative source could be found.<\/p>\n

In March, Hyundai was forced to idle its Korean plants because of a shortage of parts normally imported from China \u2013 the original source of the coronavirus and the first country to shut down its auto industry.<\/p>\n

\u201cIn a typical, well-run assembly plant, there may be only 20 minutes of on-hand inventory for any significant Tier 1 part,\u201d Power\u2019s Betts said. If that flow were interrupted even briefly, it would take only minutes before the assembly plant \u201cwould be shut down for lack of parts.\u201d<\/p>\n

\"\"<\/a>
Hyundai had to shut down its plants in South Korea due to a parts shortage related to the coronavirus outbreak in China.<\/figcaption><\/figure>\n

As tough as the near-nationwide lockdown has been on major automakers it has been even tougher on parts manufacturers, many of which have only marginal cash reserves. They also have fewer resources to ensure they will be able to protect their own workers from COVID-19, a senior General Motors executive told TheDetroitBureau.com on background. GM and other automakers say they have begun working with suppliers to assist in their own safety efforts.<\/p>\n

The industry does have a bit of leeway. Even with the nation\u2019s 53 auto assembly plants idled for more than a month \u2013 and few vehicles coming in from foreign plants \u2013 sales have plunged so low that there remain plenty of cars, trucks and crossovers on dealer lots. During a webinar this week, Tyson Jominy, another senior executive with J.D. Power, noted that demand was off about 55% during the first half of April, with sales not expected to reach anywhere close to a normal level until July. Overall, the research firm expects 2020 will now see U.S. sales slip as low as 12.4 million, down from 17.1 million last year.<\/p>\n

(Automakers push out until May plans to restart U.S. production.)<\/strong><\/span><\/em><\/a><\/p>\n

Even so, getting the auto industry back up and running will go a long way towards priming the nation\u2019s economic pump. In better times, those 53 assembly plants were producing as much as $11 billion worth of new vehicles each week. And the industry employs roughly 10 million Americans in designing, marketing, assembling and selling those cars \u2013 equal to nearly half of all the U.S. jobs that have been lost due to the pandemic during the past month.<\/p>\n","protected":false},"excerpt":{"rendered":"

U.S. auto assembly lines are expected to start ramping up again between late April and mid-May – but will they be able to stay open? There will be many challenges facing the industry in the month ahead, reports TheDetroitBureau.com.<\/p>\n","protected":false},"author":2,"featured_media":146057,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,8,5],"tags":[],"make":[],"post-state":[],"category_old":[118,150,151,123,133,131,299,132,283,125,124,139,148,128,278,288],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/146053"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=146053"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/146053\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/146057"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=146053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=146053"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=146053"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=146053"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=146053"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=146053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}