Toyota Motor Corp is currently having to contend with idle factories in Asia, reducing the automaker’s estimated output by over 47,000 units this month. Shockingly, it’s not alleged to have anything to do with the semiconductor shortage that’s been wreaking havoc on Western markets.
With chip production having been localized primarily in China and Taiwan, Asian suppliers have had better access to them. But Eastern markets have still been subjected to other routine plant closures due to supply chain restrictions stemming from the pandemic. Existing protocols in China, combined with renewed restrictions in Japan, have created a situation impacting numerous automakers with Toyota announcing this week that it probably won’t reach its goal of manufacturing 9 million cars this year — though it made sure to include the ongoing semiconductor issue as relevant.
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.
Nissan said Tuesday that it plans to temporarily shut down its global headquarters and several factories in Japan to help curtail the spread of the novel coronavirus. While Japanese automakers are legally allowed to operate within the country (with conditions), most have instituted some amount of health countermeasures independently. The nation has also formed a joint council for automakers and component suppliers to work with the government in maintaining supply chains while avoiding future contagion risks.
Despite the level of precautions taken, the country’s automakers are still estimated to lose at least $1.6 billion as the pandemic suppresses demand around the world. Nissan, which issued profit warnings in 2019, went into 2020 expecting to eliminate thousands of positions so it could begin amassing $4.4 billion in savings by 2023. Marketing budgets and product lineups would also need to be rejiggered dramatically to assure profitability moving forward. With the coronavirus further complicating the company’s strategy, May’s idling could be about more than just containing the coronavirus.
Volkswagen is furloughing around 1,500 assembly workers in Chattanooga, TN. Production is being idled on account of the coronavirus, making VW just one of many brands enacting a temporary shutdown. While the number of employees affected varies between reports, VW-Chattanooga spokeswoman Amanda Plecas said around 2,500 employees will be furloughed on April 11th. The downtime is expected to last roughly four weeks.
“Our primary objective is to protect the financial health of Volkswagen for the benefit of our team as we address the emerging and ongoing impacts of the COVID-19 outbreak on our industry,” Tom du Plessis, president and CEO of Volkswagen Chattanooga, said in a statement. “Right now we have limited visibility on when we will be able to resume production, but we are committed to doing everything we can to preserve jobs. During this time we will be intensely focused on preparing to reopen in a responsible way, ensuring our team has the opportunity to return to work safely and as quickly as practicable.”
With Panasonic having already made plans to ramp down production at the Nevada battery facility it shares with Tesla, followed by a 14-day closure to curtail the spread of the new coronavirus, its business partner has decided to follow suit. Tesla now plans on reducing on-site staff at Gigafactory 1 by 75 percent, according to the local county manager Austin Osborne.
“Tesla has informed us that the Gigafactory in Storey County is reducing on-site staff by roughly 75 [percent] in the coming days,” he explained via the county’s website on Thursday. “Our companies at [Tahoe Reno Industrial Center] TRIC are taking the COVID-19 matter seriously, and regularly report to us the measures they are taking to adhere to the established guidelines while maintaining essential operations. Checking employee temperatures, creating central access, allowing remote work, maintaining workstation distance, and others are occurring.”
With Ford looking to get pickups rolling off the assembly line again by April 6th, where does its rivals stand?
The list is far from complete, and schedules for resuming production are fluid as a 1950s executive’s lunch, but there’s details to share on when certain U.S. autoworkers might be headed back to the factory.
Automakers — and their accountants — are playing the wait-and-see game as the coronavirus outbreak continues to grow in China, throwing the assembly of crucial vehicle components into disarray.
Korean automaker Hyundai has now announced its domestic plants have gone dark, citing supply chain disruptions born of the virus and the aggressive lockdowns enacted to curtail its spread.
After a fire that rocked Meridian Magnesium Products of America’s ability to effectively supply automakers, Ford and a handful of other automakers found themselves in trouble. The Blue Oval had arguably the most to lose with its cash cow F-Series trucks seeing production idled for the foreseeable future. Fortunately, there is a ray of hope shining through the fog.
Numerous sources are claiming assembly could resume on the F-150 by this Friday. Previous estimates had Ford’s truck production being stalled for weeks. However plants in Dearborn, Michigan, and Kansas City, Missouri, are believed to resume operations by May 18th. Unfortunately, Ford’s Super Duty pickups at its Louisville truck plant won’t be getting the same treatment. Production for that facility is to remain stalled indefinitely.