The number of automakers shutting down or reducing output at their production facilities continues to grow in the U.S. and Europe.
Daimler AG, BMW Group and Toyota have joined several other automakers in suspending production in Europe, as well as work in selected administrative departments, for at least two weeks.
In the U.S., Honda is suspending production at its plants in Ohio, Alabama and Indiana for six days beginning March 23. Meanwhile EV maker Tesla was ordered to comply with California law and shut down its plant in Fremont as part of the San Francisco shelter-in-place order. The automaker’s plant is still up and running.
Honda said its employees will receive their full pay during the shutdown, which will be used to clean the facilities to guard against infection of the coronavirus. The shutdown will mean a loss of 40,000 vehicles, Honda officials said.
As far as European automakers go, Daimler, BMW and Toyota joined Volkswagen AG, PSA, Fiat Chrysler Automobiles N.V. and Ford Motor Co. in cutting production levels to facilitate plant shutdowns. Daimler revealed its plans Tuesday while BMW followed suit as part of its annual meeting today.
“Our production is geared towards sales development forecasts – and we are adjusting our production volumes flexibly in line with demand,” said newly appointed CEO Oliver Zipse.
“Since yesterday: We began to shut down our European and Rosslyn automotive plants, which will close by the end of the week. The interruption of production for the mentioned plants is currently planned to run until April 19.”
The Bavarian automaker is closing its European and Rosslyn, South Africa plants. Additionally, BMW is the parent company for Rolls-Royce and Mini. Rolls announced it was shutting down its plant starting March 23. No official word from Mini yet.
Daimler’s suspension of production includes its car, van and commercial vehicle plants in Europe and will start this week, the company said in a statement.
“Connected to this is an assessment of global supply chains, which currently cannot be maintained to their full extent,” the company noted.
“An extension of this measure will depend on further developments. Wherever operations need to be continued, the company will take appropriate precautions to prevent the infection of its employees.”
Given the ongoing spread of COVID-19, the economic effects on Daimler cannot be adequately determined or reliably quantified at this time, the company’s statement said. The statement suggested the shutdown also could force the company to close its North American plants in Alabama and Mexico.
Daimler management noted it is monitoring the situation constantly and will take further measures as required. Full operations will be resumed when the situation improves. Last week, Daimler had said it was canceling it annual shareholders meeting, which was scheduled for April 1, in Berlin.
The German luxury carmaker already was facing a difficult year because of struggles to finance ambitious investments in new technology, such as electric vehicles and autonomous vehicles even before the collapse of car sales in China after the outbreak of the COVID-19 virus.
Michael Strong contributed to this report.