Ford Motor Co. on Tuesday cautioned it is “reassessing” when to reopen its North American manufacturing network, and is “not planning” to meet its original goal of having production resume by March 30. But any decision to extend the current shutdown could run up against Pres. Donald Trump’s stated desire to have the U.S. “opened up and raring to go by Easter.”
Following meetings with the United Auto Workers Union last week, Ford and cross-town rivals Fiat Chrysler Automobiles and General Motors announced plans to shutter their continent-wide production operations through at least March 30. Virtually all manufacturers, including Honda, Toyota, Volvo and Volkswagen, have announced similar shutdowns in recent days. Company insiders have warned that such closures could drag on well into April – or beyond — depending on how efforts to bring the coronavirus pandemic under control are faring.
“Ford’s top priority is the health and safety of our employees, dealers, customers, suppliers and other stakeholders,” Kumar Galhotra, Ford’s president of North American operations, said in a statement. “In light of various governments’ orders to stay and work from home, Ford is not planning to restart our plants in the U.S., Canada and Mexico on Monday, March 30 as originally hoped.”
The automaker is “assessing various options,” Galhotra added, though no timetable was provided as to when further announcements might be made.
Ford isn’t the only automaker reconsidering the timing of its closures. In its original statement, GM said its network would remain idled until “at least” March 30. And, while FCA said it had no comment on a possible extension of its production network shutdown, a well-placed source said “everything is being re-evaluated constantly.”
In light of other recent developments, the original, March 30 target laid out by Detroit’s Big Three now seems optimistic. Sixteen states now have shelter-in-place orders covering the vast majority of their citizenry. That includes Michigan, where GM, Ford and FCA are all based, and where they have large portions of their manufacturing options located. Michigan Gov. Gretchen Whitmer’s order, which took effect on Tuesday at 12:01 AM, won’t lift until April 13, the day after Pres. Trump’s Easter target.
There will be some exceptions, all three of the manufacturers now moving to bring back some of their workers to assist in the production of essential medical supplies, such as masks, respirators and ventilators.
FCA and Ford already are producing face guards. Ford plans to produce both ventilators and respirators as part of its Project Apollo effort teaming it with both 3M and GE Healthcare. GM’s Project V will partner it with ventilator manufacturer Ventec Life Solutions.
The impact of the automotive shutdown alone is substantial, according to industry analysts, idling tens of thousands of production workers across the U.S., Canada and Mexico. The spill-over impact is even more substantial, however, said Tyson Jominy, an executive with J.D. Power, noting there are about eight jobs linked to every employee at one of the major automakers. These include not only workers at parts plants but the cafeteria employees and landscape crews who are typically not directly employed by the carmakers.
How much pressure the automakers might come under from the White House is uncertain, though Trump has repeatedly said in recent days that the country can’t risk killing its economy in order to maximize precautions about the coronavirus.
That said, Ford’s announcement is in keeping with the recommendations of many medical experts who warn that it could take many weeks, even months to ensure there isn’t a new flare-up of Covid-19, the disease caused by the coronavirus.
The plant closures reflect more than just the pandemic. In its statement last week, GM noted it also took into consideration “market conditions.” U.S. sales are expected to tumble as much as 41% for March and as much as 60% in April, according to J.D. Power’s Jominy. The closures are helping prevent a massive build-up of unsold inventory.