The big three automakers in the United States are facing increasing pressure to close their domestic factories as the federal government, states, and other local governments issue new guidelines to help slow the spread of the novel coronavirus.
The United Auto Workers union said in a letter to members on Tuesday that it’s advocating for at least a two-week shutdown of the automotive factories to protect employees who aren’t able to work remotely as well as their families and communities. But the UAW said in its letter that Ford, General Motors, and Fiat Chrysler Automobiles “were not willing to implement this request,” which was made after the automakers formed a task force with the union to help fight COVID-19, the disease caused by the novel coronavirus. UAW president Rory Gamble said the companies instead asked for 48 hours to put together plans to “safeguard workers in their facilities.”
“The 48-hour window is up this afternoon,” Gamble wrote. “We will be evaluating what the companies submit today and there will be a meeting this evening at 6 p.m., where the Task Force will review plans for the safety and health of all members, their families and our communities.”
Ford, GM, and FCA last week informed much of their white-collar workforces to work remotely, but they have kept manufacturing operations up and running despite plant closures overseas. The Volkswagen Group announced on Tuesday that it is temporarily shutting down its factories across Europe, as is Mercedes-Benz parent company Daimler, following similar decisions from Renault and the PSA Group. Ford has even said it will shut down its own European factories in order to help slow the spread of the virus on the continent, which the World Health Organization now considers to be the “epicenter” of the pandemic. And all of these companies had to deal with shutdowns in China when the government there ordered closures earlier this year.
The Detroit-based automakers have taken some steps to mitigate the chance of coronavirus spread at their US factories. Ford said it would close any facility that’s been exposed to a confirmed coronavirus case for “at least 24 hours so the building can be disinfected,” while Fiat Chrysler said it was adjusting production at its manufacturing plants to create more space between employees.
But that isn’t enough for the UAW, which says that WHO and the Centers for Disease Control and Prevention guidelines about limiting gatherings of people should logically lead to plant closures. What’s more, Fiat Chrysler has had workers walk out of two different factories (one of which was in Canada) in recent days out of fear of coronavirus spread.
While shutting down factories may seem like a big step, new vehicle sales are expected to drop as people around the country adhere to social distancing and even quarantine guidelines from the government. Keeping them open could create a backlog of inventory that would be difficult to move and that would quickly depreciate. In fact, automakers are already taking steps to try to juice new car buying amid the pandemic. GM is offering 0 percent interest financing for seven years and four months of deferred payments on new car purchases. Ford will also delay the first required payment for up to 90 days on new vehicle purchases.
What’s more, some experts think the full ramifications of China locking down manufacturing hubs like Wuhan have not yet been felt and that supply chain disruptions are likely to have a negative impact on these companies’ abilities to produce vehicles in the coming months.
Many foreign automakers have manufacturing facilities in the US, and as of now, all of those are still up and running. A number of them have said they’ve placed travel restrictions on employees and issued guidance on staying home if they feel ill, and they are also stepping up cleaning efforts. But as more areas of the country adopt the guidance of the CDC and others on banning large gatherings and having people stay home as much as possible, these companies are also considering shutdowns. Honda and Subaru, for example, have told The Verge that they have contingencies in place for production disruptions and full factory shutdowns.
The outlier here is Tesla, which is the only large automaker in the US that employs a non-unionized workforce. Tesla has not issued any public statements about what it plans to do at its Fremont, California, automotive plant (or at its battery factory in Nevada or at its solar panel factory in New York). In fact, the company is continuing to pump out cars there despite a new Bay Area-wide order to close nonessential businesses and for people to shelter in place.