By on May 5, 2020

fca

The first quarter of 2020 spilled a tsunami of red ink over Fiat Chrysler’s balance sheet, with the automaker posting a $1.84 billion net loss.

FCA seemed to be the canary in the coal mine when it came to the coronavirus, as the automaker was forced to idle an assembly plant in Europe even when the pandemic was still a regional outbreak in China. Where did the virus then take hold? In Italy, of course — FCA’s European base of operations. You know what came after that.

Seemingly more so than its Detroit rivals, FCA has been eager to get factories back up and running, and the Q1 earnings report only adds to its desire for something approaching normalcy. The folks in Auburn Hills want to open things up starting May 18th.

After having its initial May 4th phased restart kiboshed by government and union pressure, FCA now wants to start gradually opening up its North American plants as soon as Michigan’s stay-at-home order ends, independent of any unified proclamation with General Motors and Ford.

Again, it could face roadblocks in the form of the state of Michigan, where Gov. Whitmer recently extended the state’s emergency orders until May 28th, and but not from the United Auto Workers, which appears on board. Each member of the Detroit Three claims to have extensive new health protocol in place to minimize viral risk to employees. The situation, especially in Michigan, is still a dangerous one, the UAW claims.

From The Detroit News:

North American plants will ramp-up progressively starting the week of May 18 except for Belvidere Assembly in Illinois, which will begin by June 1. Additional safety procedures may require a reduction in jobs per hour, the company said, and it will align production with consumer demand. Electrified, high-margin and low-inventory vehicles will take precedence.

Since the outset of the pandemic, “FCA’s first priority has been the health and safety of its employees and communities,” CEO Mike Manley stated in FCA’s Q1 earnings report.

“The pandemic has had, and continues to have, a significant impact on our operations. With our experienced leadership team and dedicated employees, I have the utmost confidence in our ability to navigate through this crisis and emerge well positioned to grow and prosper on the other side.”

fca

FCA’s net profit in the previous quarter topped $2.9 billion. How quickly things can change. While the automaker’s manufacturing base in Italy is just now starting to open up, and despite plans for a North American return to production, FCA anticipates a far worse Q2 on the horizon (not unlike rival Ford, which recently posted a similar Q1 loss).

UAW President Rory Gamble weighed in on FCA’s plans, just days after announcing that a restart wasn’t safe.

“The UAW has and continues to have dialogue with all of our employers and employment sectors about the safety and security surrounding reopening worksites,” he said in a statement.

“In the case of the Big 3, through the Task Force we have had an ongoing dialogue and we have supported a number of measures put in place to address Center for Disease Control (CDC) and World Health Organization (WHO) guidelines from FCA, GM and Ford to protect our health and safety in the plant. Our volunteer members and the companies have done great work to reconfigure plants to achieve this safety goal.”

Sounds markedly different from the release UAW put out ahead of FCA’s tentative May 4th reopening. Certainly, there’s an air of inevitability about it all — something Gamble himself addressed:

“We continue to advocate for as much testing as possible at the current time and eventually full-testing when available,” said, adding, “As for the start date, the companies contractually make that decision and we all knew this day would come. Our UAW focus and role is and will continue to be, on health and safety protocols to protect our members.”

With the UAW on board, Michigan’s governor becomes the last potential hurdle. The state’s stay-at-home order expires on May 15th and, despite the extension of Michigan’s state of emergency through May 28th, that particular declaration does not cover manufacturing facilities. However, any setback on the virus front could see stay-at-home return.

[Images: Fiat Chrysler]

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15 Comments on “Fiat Chrysler Posts Big Loss, Eyes Production Restart ASAP...”


  • avatar
    EBFlex

    Yet more proof these ridiculous shutdowns that are not based on science are doing more harm than good.

    This nonsense needs to end and China needs to take responsibility for this reimburse the for all of this.

    • 0 avatar
      Lorenzo

      China doesn’t have the $4-6 Trillion lost in the US alone. The government is going to print money, inflation will go wild, and the unemployment rate will skyrocket, as many small businesses won’t re-open at all.

      The cost of the shutdowns will only get bigger, since there’s no science to back up “social distancing” or mandatory mask use for the general public. Both of those measures, along with governors using staged re-openings, will spread the pain over a longer period.

      There are several epidemiologists, including one with a Nobel Prize, who have stated the lockdown was unnecessary. Eventually their opinion is going to make many of our public health officers look like the ill-informed desk jockey administrators they are.

    • 0 avatar
      thelaine

      This is an outstanding article, which has citations throughout. It demonstrates, again, that we panicked and did this to ourselves. Young and healthy people were NEVER at risk, and could have been allowed to work. People should be ashamed. The continued lockdowns are criminally inexcusable. The data is available to anyone who has a brain and is not terrified.

      “We were lied to. At the onset of the global panic in early March, the World Health Organization said the virus had a 3.4% fatality rate. Then, the same powers that be scared the world by saying a new version of the virus was killing 10% in parts of Italy. Eventually, they did the same thing with New York City and warned us that the rest of the country would be like NYC.

      In reality, they ignored the fact that this virus had already spread for several months and infected exponentially more people than the official testing showed, that most people were asymptomatic or mildly symptomatic, and that therefore, for most people, the fatality rate is a tiny fraction of the panic porn numbers – more in line with 0.1-0.3% or perhaps, as we will see, much less for some.

      “…even in the New York City metro, which has for some reason been hit worse than any other region (more than half of deaths are from the tri-state region), the fatality rate is still well under 1% because at least 25% of NYC residents got the virus.”

      “A large group of Danish epidemiologists published the results of a serology test from 9,496 blood donors who were tested for the antibodies in order to donate plasma to those sick with the virus, as we have begun to do in America. The result? An infection fatality rate of 82 per 100,000, or 0.082. That is less than 0.1%, and it even includes people in their 60s.”

      “…thus, for those who are of prime working age and also have no serious health conditions, the fatality rate is “several fold” below 0.082%. As such, it’s simply indefensible not to put them back to work and certainly send kids with an even lower risk back to school.”

      Much more at the link:

      https://www.conservativereview.com/news/horowitz-young-healthy-not-dying-covid-19-heres-thats-vitally-important/

      • 0 avatar
        Lou_BC

        Your theory is to let healthy younger people work and protect the vulnerable/high risk like those over 60 years of age, those with preexisting conditions and the obese.

        • 0 avatar
          thelaine

          Bingo, Lou. Such a huge percentage of the deaths are old people, and we did a very poor job of protecting them, particularly in NewYork. Known infected people were sent back into nursing homes!

          A focused approach avoids the economic devastation and builds general immunity. Not my theory though, of course. I think of it as the Swedish model, but other countries and US states did the same. If they build immunity, they have much less to fear from subsequent waves of infection. It is logical, and balanced.

          • 0 avatar
            Lou_BC

            @thelaine
            I’m all for protecting the old, the weak, the frail, the ill. One needs to look at the math.

            There are 328.2 million Americans and 151 million workers/jobs.
            18% over 60 years old = 59.076 million
            24% 18 years or under = 78.768 million
            40% obese = 131.28%
            40% Chronic diseases = 131.28%
            If you count obese and chronic conditions together as 40% and minus all of these categories from the total, it will give you the number of low risk healthy adults in the USA.

            That number is 59.076‬ million.

            You would be short 60% of the needed workers.

            Since testing is inadequate, you don’t know who is immune or who is a carrier.

            The sad part of all this is that the majority of Americans out there are unhealthy.

            The math is not in favour of your theory.

          • 0 avatar
            thelaine

            Sorry, Lou, but you are a reflexive authoritarian and you have greatly exaggerated. Please read the article I have linked, so you can get the facts. Please see the Swedish response. Old people in nursing homes are the target. Young people are virtually invulnerable. You do not need to force everyone out of the workforce who could possibly die from the virus. If people can work, and are willing, you let them work. I’m not in favor of locking up 80 year olds, either. If they want to go to Costco, let them go.

            My argument is to match the response to the risk, and the risk is primarily to old people, with other risk categories also acknowledged.

            Again, all you care about is the wuhandeathcount. The unemployment doesn’t matter to you. The poverty doesn’t bother you. There is a balance here, which you refuse to take into account. It is because you are terrified, emotional and irrational.

            When you have read the article, and can actually try to fairly represent the argument, come back. You are just playing a game. I get it. At least try to understand, before you make assumptions. It is all there, in the article. It is a great summary. Just do it. You will be better for it.

          • 0 avatar
            thelaine

            Excellent job of condescending to Americans, BTW Lou. The Canadian smug is real.

          • 0 avatar
            thelaine

            Lou,

            Have you been keeping up with the results of the multiple serology studies done at USC, Florida, Stanford, etc? ALL of them concluded that the wuhanvirus has been here for a long time and has infected far more individuals than the “models” assumed. The CFR is down to .01 to .03% . Like the flu, Lou. Should we destroy ourselves in response to this virus?

            How long are you willing to hide from from the flu? How much economic destruction is enough?

            CDC and the serology studies found for the 18 – 45 demographic the odds of dying from COVID 19 to be 11 out of every 100K infected, you know – like the flu, Lou.

            Do some research on this. Get some knowledge. Don’t be a lemming. Turn off the TV. Do the work and learn the truth about this virus. Read the article I linked. Try to at least understand it.

          • 0 avatar
            Lou_BC

            It is well known that the three highest risk factors for hospitalization due to SARS-CoV-2 are obesity, preexisting medical conditions and over 60.
            25% of people under 60 end up in hospital due to developing serious COVID-19 disease. The majority of that 25% is obese and/or has a comorbidity i.e. preexisting condition.

            I’m not arguing the relative risk, that is debatable. I’m pointing out who is at risk.

            You argue that the young and healthy should be allowed to work. I AGREE.

            Statistically, the majority of American workforce isn’t healthy.

            That means the majority are at risk.

          • 0 avatar
            thelaine

            Lou,

            People forget the lockdown had nothing to do w/ mortality, it was about not overwhelming hospitals and that’s over – in fact most hospitals are far below capacity – causing them to fail financially

            Delaying opening will actually increase mortality by making economic conditions more dire for more people

            Herd immunity is the goal – there will be no vaccine – Fauci promised one for SARS in 2003 and it was a complete failure – corona viruses mutate – this SARS virus, the Wuhan virus, has 8-30 mutations depending on which source you read

            We are committing economic suicide. People should be able to choose to work. You have grossly exaggerated the risk to people who nearly 80 years old or older. Not all “risk” is created equal. You are not doing that.

        • 0 avatar
          thelaine

          Lou,

          You also completely refuse to acknowledge the economic trade-offs. You are obsessed with the death count and cannot see past it. Wuhanvirus is about as deadly as the flu. The data is clear. The “models” that were relied upon were utter garbage. Read the article and let me know what you think after you have actually looked at some data.

          Why are we crushing our economy when we are no longer worried about overwhelming our hospitals? Can you answer that, Lou?

  • avatar
    Fred

    Judging by my local lot it’s because they aren’t selling anything, not that they aren’t producing.

    • 0 avatar
      NoID

      Automakers make money when a dealer purchases a vehicle from the automaker, not when a consumer purchases a vehicle from the dealer. To be more precise, typically a vehicle is considered “sold” when it is released for shipping to the dealer. These are the sales that automakers report.

      In that sense, they are neither selling nor producing, at least in North and South America.

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