Ford Will Keep US Plants Closed beyond March 3003/25/2020
Despite plans announced last week to idle production until March 30, which was the plan the big three U.S. automakers agreed upon with the UAW, Ford expects to keep its plants closed weeks longer. The state of Michigan issued shelter-in-place orders this week designed to be active until April 13, as have several neighboring states, making restarting production at several automakers’ Midwest plants unattainable immediately after the last day of March.
“Ford’s top priority is the health and safety of our employees, dealers, customers, suppliers and other stakeholders,” said Kumar Galhotra, North America Ford president. “In light of various governments’ orders to stay and work from home, Ford is not planning to restart our plants in the U.S., Canada and Mexico on Monday, March 30, as originally hoped.”
The number of states implementing shelter-in-place orders puts into serious question the Detroit Three automakers’ plans, as well as those of many suppliers and UAW workers.
“We are assessing various options and working with union leaders—including the United Auto Workers and Unifor—on the optimal timing for resuming vehicle production, keeping the well-being of our workforce top of mind,” Galhotra added, promising additional updates as they are confirmed by the automaker.
FCA and General Motors have not made definitive statements regarding resuming U.S. production. It’s also too early to look at auto plants restarting in Europe for guidance, unless we acknowledge that several European automakers are signaling even mid-April is overly optimistic.
A couple of European automakers have suggested plant closures could last well into May even if quarantine measures are lifted, simply because not all supplier plants in different countries are likely to come back online at the same time. Further, depressed vehicle demand could motivate automakers to postpone production restarts in April and May, sinces vehicle sales have slowed considerably in the preceding two months.
It remains to be seen whether the three Michigan automakers can restart production in the first half of April at all, given the climbing hospitalization rate, as well as ever more stringent quarantine measures ordered by individual states.
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