#Coronavirus

Michigan auto dealers will be allowed to resume in-person sales on Tuesday, according to the latest in a long list of executive orders signed by Gov. Gretchen Whitmer. The state, which harbors the fourth-highest coronavirus death toll in the country (following New York, New Jersey, and Massachusetts), has enacted some of the strictest countermeasures in the country.

This has created no shortage of pressure to both reopen Michigan so life/business can return to normal and maintain closures to avoid further contagion risks. Obviously, that’s proven difficult to do. All steps taken towards reopening come with conditions, including those established for Michigan’s dealerships.

But first, some backstory.

Ford Motor Co. temporarily shut down its Chicago Assembly Plant for a portion of Tuesday after two employees tested positive for the novel coronavirus. The facility had only been open for a single day, suggesting automakers may have to contend with infected employees on a regular basis. Responsible for Ford Explorer, Police Interceptor Utility, and Lincoln Aviator production, the site was idled briefly for disinfection before being reopened on Wednesday morning.

This return proved short-lived. The Chicago Tribune reports that Chicago Assembly closed again today, although COVID-19 was not to blame. Wednesday’s culprit happened to be those nasty supply chain issues we’ve been harping on. Ford’s Dearborn Truck Plant (home of the F-Series) did have a fresh coronavirus case, however. The facility was forced to match the Chicago factory’s response and shut down for sanitization measures on the same day — though at least Dearborn Truck seems to have a sufficient number of parts on hand.

It could be a blip, a fluke, but it could also become the norm as consumer buying habits struggle to return to something approaching normal. Via data from J.D. Power, we can see that U.S. auto sales failed to make any headway in the week ending May 17th, ending a six-week climb out the lockdown sales pit.

Finding a guilty party on which to pin the result is proving difficult.

Mexico spent plenty of time discussing the phased reopening of automotive plants last week. The presumption was that the nation would have to establish guidelines for industrial work zones that would allow some to resume production after May 18th, with timing coinciding with U.S. facilities that will be in desperate need of parts and vehicles. However, last minute changes left everyone wildly confused.

On Thursday, the Mexican government said the industrial sector wouldn’t be eligible for reopening until June 1st. The following day, it explained that the date didn’t actually mean much for automotive outfits, adding that companies could reopen at any time if they verified an adherence to new safety protocols. Thanks to another announcement over the weekend, most of the residual confusion has subsidized. Mexican facilities can reopen, provided they have the correct paperwork on file.

Mitsubishi Motors’ membership in the great Renault-Nissan alliance won’t protect it from economic realities arising from the coronavirus pandemic. On Tuesday, the automaker announced an 89-percent drop in operating profit for the year ended March, with black ink totaling just $119 million.

Rocked by the virus that’s thrown every automaker’s balance sheet into disarray, Mitsubishi scrapped its planned dividend and held back from issuing a projection for the current year. It’s also thinking small. The virus has changed the global landscape, and Mitsubishi says it will have to change to meet the challenge.

As predicted, supply issues are hampering the automotive industry’s relaunch. The good news is that practically everyone on the planet understood this would be a problem, but it’s undercut by the preliminary damage created by coronavirus lockdowns.

While automakers had sizable cash reserves with which to endure an economic shutdown, many suppliers did not. Small part suppliers have struggled with liquidity as larger equipment manufacturers try to figure out how to ramp up production and address their own supply headaches. As it turns out, shutting down an entire economic sector is a lot easier than restarting one after it’s been kneecapped.

The first sneak peak at Ford’s next-generation F-150 was expected to occur at the newly temperate Detroit auto show in June; alas, the coronavirus pandemic put the kibosh on those plans (for both Ford and the show’s organizers).

With the show scuttled and production idled for a period of two months — Detroit Three automakers resume limited production on Monday — rumors naturally arose of a product timeline thrown into disarray. This week brought unofficial word that production of the 14th-generation pickup has been pushed back for a second time. Reacting quickly, Ford insists we’ll see new F-150s rolling into dealers before the end of the year.

You read earlier this week how midsize pickups, despite adding the Ford Ranger and Jeep Gladiator to their ranks, suffered in terms of market share this year. It’s been a wild ride, these past few months, but the biggest strike against the purchase of a midsize truck remains the same as before: the existence of full-size trucks — which automakers seem far more likely to discount, boosting their vehicle-per-dollar proposition.

Especially in these pandemic times.

Detroit moved an unexpectedly large number of half-tons over the past two months, greasing the wheels via a sudden love affair with zero-interest, 84-month financing. Full-size trucks dipped instead of dived, but midsizers have now picked themselves up and dusted themselves off.

Production at General Motors’ Mexican assembly plants could start up next week, following a go-ahead from the country’s leadership to resume factory activity. The faster GM’s able to come back online south of the Rio Grande, the better.

In an earnings briefing last week, GM, like its rival Fiat Chrysler, pointed to a declining inventory of lucrative pickups — a segment that proved extremely resilient over the past two months, even during the depths of the coronavirus lockdown. With U.S. plants resuming work on Monday, a concurrent Mexican restart is what the company needs.

A joint Toyota-Mazda assembly plant in Huntsville, Alabama could see its opening delayed, all thanks to the economic turmoil and construction delays borne of the coronavirus pandemic.

Akira Koga, Mazda’s senior managing executive officer, said in an earnings briefing Thursday that construction on the $1.6 billion joint facility, first announced in early 2018, is being hampered by virus fallout. That throws into doubt the timing of two new crossover vehicles — one of which is crucial to Mazda’s future.

The fiscal year that wrapped up at the end of March was not a good one for Mazda, the company claims, with profit cut almost in half amid fallout from the coronavirus pandemic. On Thursday, Mazda revealed a full-year operating profit of just $408 million — its lowest showing in 8 years.

Smaller than its Japanese rivals and heavily dependent on the North American consumer, Mazda was hit hard by lockdown orders that dried up sales in the U.S. and Canada in March.

Barring low gas prices you couldn’t take advantage of and your author’s adventures in cooking with curry, the past two months didn’t bring much in the way of benefits. Millions are out of work, nerves are frayed, hospital ICUs remain crowded with COVID-19 patients, and bad takes still run rampant on Twitter. Daily!

Anyone who did venture outdoors this spring, however, may have noticed one specific change for the better, and science now backs it up.

Tesla CEO Elon Musk made waves this past weekend by declaring his Fremont, California assembly plant would resume production in defiance of the stay-at-home orders imposed by Alameda County, bolstering his claim by threatening to move his HQ out of the state. He also fired off a lawsuit for good measure.

Musk wasn’t too pleased with the county’s decision to extend the closure of non-essential businesses through the end of the month, arguing that the governor’s word (allowing a return of statewide manufacturing) held sway.

Late Tuesday, the county issued what it probably hopes is the final word on the matter.

As assembly plants cautiously fire up and buyers slowly return to the new vehicle market in North America, automakers have their fingers crossed, hoping that an increase in demand from frightened first-time buyers will offset lost sales from both the newly jobless and hard-hit rental agencies.

Data out of Europe and China seems to suggest the fright factor is real, but just how much (and for how long) automakers can depend on it really depends on the virus itself.

The ongoing coronavirus pandemic only reared its spiky head at the tail end of the fiscal year, but the disruption to automakers was strongly felt. In a new vehicle market that was largely cooling off, the impact of fewer sales and idled plants was immediate.

That said, the virus didn’t spread the damage evenly.