Under UAW Pressure, Detroit Three Close Plants

After initially resisting UAW pressure to close their plants in the face of the COVID-19 outbreak, the Detroit Three automakers announce Wednesday they will shut down their North American facilities at least through March 30.

General Motors says it will suspend its North American manufacturing operations until at least March 30 “due to market conditions, to deep clean facilities and continue to protect people.” Production status will be re-evaluated week-to-week afterward.

“GM and the UAW have always put the health and safety of the people entering GM plants first, and we have agreed to a systematic, orderly suspension of production to aid in fighting COVID-19/coronavirus,” GM Chairman and CEO Mary Barra says in a statement.

“We have been taking extraordinary precautions around the world to keep our plant environments safe, and recent developments in North America make it clear this is the right thing to do now.”

Ford will halt production at its North American manufacturing sites through March 30 following Thursday evening shifts “to thoroughly clean its facilities to protect its workforce and boost containment efforts for the COVID-19 coronavirus.”

“We’re continuing to work closely with union leaders, especially the United Auto Workers, to find ways to help keep our workforce healthy and safe – even as we look at solutions for continuing to provide the vehicles customers really want and need,” Kumar Galhotra, Ford’s president of North America, says in a statement.

Fiat Chrysler Automobiles said it would cease production at its North American plants starting Wednesday through the end of March.

“While production is paused, the Company will put actions into place to facilitate the steps agreed to through the joint task-force set up between the UAW and the automakers,” FCA says in a statement. “Through this period, which we will re-evaluate at the end of this month, FCA will work to enhance its manufacturing operations to facilitate the changes agreed with the UAW including shift timings, structures and enhanced cleaning protocols.”

Part of the UAW’s demand to close U.S. plants stemmed from positive tests for COVID-19 for a worker at FCA’s Sterling Heights, MI, Assembly Plant and one at a transmission facility in Kokomo, IN.

The agreement between the UAW and Detroit’s automakers to operate plants on a rotating basis, announced Tuesday night, appeared to have failed even before it ever was implemented.

UAW officials admitted privately they were facing a situation where absenteeism was increasing as schools closed in states such as Michigan and Ohio. In addition, some union members were refusing to work after co-workers tested positive for the virus.

UAW President Rory Gamble, who since last weekend was urging automakers to implement a two-week shutdown while dealing with an increasingly rebellious membership, praised the closures.

“Today’s action is the prudent thing to do. By taking a shutdown and working through next steps, we protect UAW members, their families and the community,” said Gamble. “We have time to review best practices when the plants reopen, and we prevent the possible spread of this pandemic.”

Tesla Model 3 assy Fremont CA - Copy

Jessica Caldwell, executive director of insights for the Edmunds automotive information service, says: “This is a seismic move by the Detroit 3, but also a commendable one. These automakers are currently well-stocked with inventory and as more of the country moves to follow shelter-in-place orders, vehicle sales will inevitably be softer.

“But if the proposed (federal) stimulus package ends up moving through the Senate, this could help sales get to a bit of a healthier place when normal life resumes.”

Tesla kept its Fremont, CA, electric-vehicle factory open (pictured above) for production Wednesday despite an order from Alameda County requiring all non-essential businesses to close in an effort to curtail the spread of COVID-19.

According to an e-mail sent Wednesday to employees by Tesla’s human-resources department and cited by Tech Crunch, the automaker kept its plant open because it has had “conflicting guidance from different levels of government” over whether it could operate during the county’s so-called shelter-in-place order.

Neither Tesla nor Alameda County officials could be reached for comment, Tech Crunch says.

Honda became the first automaker to announce a major production stoppage in the U.S. when it said it would close all its North American facilities for six days starting Wednesday. Engine and transmission plants will shut down in addition to assembly plants.

Honda says it expects the shutdown to reduce production capacity by 40,000 units, and it plans to pay its 27,600 North American workers their full wages during the period.

Hyundai closed its U.S. manufacturing facilities Wednesday but did not say for how long.

In Europe, Porsche and Rolls-Royce announced production suspensions.

Porsche will close its assembly plants in Zuffenhausen and Leipzig, Germany, “for an initial period of two weeks” starting Saturday.

Rolls-Royce will suspend production at its Goodwood, U.K., manufacturing plant for two weeks starting March 23, followed by an already-planned two-week Easter maintenance shutdown.

The Society of Automotive Engineers canceled its World Congress Experience and convention in Detroit.

“In lieu of an in-person experience, SAE is looking into providing a virtual forum for WCX speakers to present to WCX attendees at a later date,” the engineering organization says.

The WCX 2020 was originally scheduled for April 21-23. 

The shutdowns reached into Canada where Unifor, the union representing Canadian auto workers, also had been under pressure to withhold the labor of its members.

“GM Canada plans to follow a suspension of its manufacturing operations with more details for timing for each plant to be determined. Production status will be reevaluated week-to-week.  GM Canada will continue to review this status in communication with local unions and through the newly announced Canada Task Force of the Presidents of Unifor, FCA Canada, Ford Canada and GM Canada,” a GM Canada spokeswoman says in an e-mailed statement.

 – with Joseph Szczesny