Tesla CEO Elon Musk’s coronavirus rant highlights just one of many hurdles automakers face in reopening plants
key point:
· Despite costing automakers billions, the majority of auto plants were closed through April and reopening dates remain a moving target.
· Issues to reopening plants range from worker safety and abiding by local mandates to internal problems of supply chain logistics and supplies.
· Tesla and the Detroit automakers are among the companies to not yet announce plant restart dates.
U.S. auto plants weren’t supposed to be closed this long due to the coronavirus pandemic. When the factories began shutting down in March, some automakers only expected the closings to last days, potentially weeks.
But despite costing automakers billions, the majority of auto plants were closed through April and reopening dates remain a moving target for an industry that thrives on certainty and precision.
Issues to reopening auto manufacturing, which makes up 6% of the U.S. GDP, range from obvious ones such as worker safety and abiding by local mandates – something Tesla CEO Elon Musk colorfully discussed earlier this week – to internal problems of supply chain logistics and supplies.
If one of the tens of thousands of parts in vehicles isn’t available, companies can’t produce and ship cars and trucks. Toyota Motor this week cited an “extensive review” with its suppliers and logistics network as reasons for delaying its plans to restart plants from Monday to the week of May 11.
“It’s extremely complex,” Ford Motor Chief Operating Officer Jim Farley said Thursday about the process to reopen the company’s operations globally.
Farley, speaking with reporters on a conference call about reopening plants, said “it’s critical that we get this restart right.” A false start could further set the industry back, endanger lives and complicate matters even more.
“We’ve gone through so many things as a company for over 100 years, but this is really unprecedented,” Farley said. “We have so much manufacturing shutdown at one point.”
Restart dates
Ford as well as General Motors and Fiat Chrysler are among the automakers to not yet announce a restart date following delays to previous restart dates. The automakers, unlike their foreign counterparts, have to negotiate the openings with the United Auto Workers union, which opposes an early-May reopening.
Several automakers could beat the Detroit automakers to production. Daimler became one of the first companies to begin producing Mercedes-Benz models this week in Alabama. It ceased production at the plant on March 23.
Others such as Hyundai Motor, Kia Motors and BMW are expected to restart plants beginning Monday. Nissan Motor, which has delayed its restart plans at least twice, is expected to reopen in mid-May. The company stopped production on March 20.
Tesla, which at one point planned to restart production next week, has not announced when production at its plant in Fremont, California will begin. To the disapproval of Musk, Alameda County, where Tesla’s factory is located, recently extended their shelter-in-place orders through the end of May.
Musk lashed out at government stay-at-home orders as “unconstitutional” and “fascist” in an expletive-laced rant on Tesla’s first-quarter earnings call on Wednesday.
Safety, supply hurdles
Automakers, particularly the Detroit automakers, have been detailing extensive safety measures to reopening their plants.
The plans include deep-cleaning; reworking processes to provide social distancing; mandatory wearing of face masks and, in some cases, shields; thermal body scanning; online prework questionnaires; and the availability of testing kits for Covid-19.
“Companies need to clearly demonstrate what they are doing to keep people safe and communicate with governments to understand how they are making closure decisions,” said Ambrose Conroy, CEO of auto consulting firm Seraph, which has been assisting companies with reopening plans.
