Detroit automakers shutter U.S. plants in move to stop coronavirus spread

The Detroit Three automakers will shut down their U.S. plants to stop the spread of coronavirus, bowing to pressure from the union representing about 150,000 hourly workers at those facilities, industry officials said.

Ford Motor Co (F.N), General Motors Co (GM.N) and Fiat Chrysler Automobiles NV (FCHA.MI) (FCAU.N) confirmed the decisions to shut U.S. plants, as well as factories in Canada and Mexico.

The Detroit automakers’ shares took a beating on Wednesday, with GM closing 17.3% lower, Ford off 10.2% and Fiat Chrysler shares ending 9.2% lower in New York. The carmakers’ North American factories build their most profitable trucks and sport utility vehicles, such as Fiat Chrysler’s Jeep Wrangler, GM’s Chevrolet Silverado pickup and the Ford F-series truck line.

The actions come less than a day after the automakers and the United Auto Workers union agreed to keep plants running with reduced shifts and staffing, and more time allowed for cleaning.

But that deal was put aside on Wednesday morning after Honda Motor Co (7267.T) said it would shut its North American factories for six days because of a slump in demand, and a worker at a Ford assembly plant in Michigan tested positive for the coronavirus.

Ford on Wednesday morning closed the final assembly building at its complex in Wayne, Michigan, where it builds the Ranger pickup truck and will assemble Bronco SUVs.

Ford said it would close all its North American plants after Thursday evening’s shifts through March 30 to thoroughly clean the factories in the United States, Canada and Mexico. GM’s timetable was the same, while FCA’s is through the end of March.

South Korea’s Hyundai Motor Co (005380.KS) closed its Montgomery, Alabama, assembly plant on Wednesday morning after an employee there tested positive for COVID-19. There were no details on when it would reopen. Toyota Motor Corp (7203.T) said it would close its North American plants for two days next week.

The Detroit Three automakers have yet to issue profit warnings, but Germany’s BMW (BMWG.DE) said on Wednesday its 2020 profit would be “significantly lower” than last year. FCA said it would update its financial guidance when it has greater visibility on the epidemic’s impact on the market.

The pain could also be felt by the U.S. government, which would lose $2 billion in tax revenue if sales in the entire U.S. auto sector stopped for a week, according to the Center for Automotive Research in Ann Arbor, Michigan.

United Auto Workers (UAW) union President Rory Gamble, who had previously called on the Detroit automakers to close their U.S. plants, in a Wednesday statement called shutdowns “the prudent thing to do.”

“Recent developments in North America make it clear this is the right thing to do now,” GM Chief Executive Mary Barra said in a separate statement.

Affected workers qualify for unemployment as well as supplemental pay from the automakers, the union said.

It was not clear whether the automakers would seek to substitute this shutdown for the one they typically take annually during the summer.

Meanwhile, other automakers in North America are still operating assembly plants, including BMW in Spartanburg, South Carolina; Kia Motors Corp (000270.KS) in West Point, Georgia, and Volkswagen AG (VOWG_p.DE) in Chattanooga, Tennessee.

Tesla Inc (TSLA.O) was operating its plant in Fremont, California, on Wednesday, despite a statement from local officials that the factory cannot continue to operate as the San Francisco Bay Area began a three-week lockdown.

Related Posts:

Question about ZIM Values? You had it right. You redeem the 100T zim bond note for face value or higher. It depends what your projects now and in the future Read more

Detroit’s Votes Might Not Count and That is a Win for the Trump Team

President Donald Trump's re-election campaign has repeatedly called into question "voting irregularities" in Wayne County, home to the Democratic stronghold of Detroit. The campaign was delivered a small victory on Read more

NEWT GINGRICH: 2020 Is A Corrupt, Stolen Election

Former House Speaker Newt Gingrich responded to President-elect Biden's victory declaration speech during an interview Sunday morning on "FOX & Friends." Gingrich said it looks to him like the Democrats have "stolen Read more

Detroit Elections Employee: Workers Coached Voters, Changed Dates on Ballots

A decades-long Detroit city employee has filed a bombshell affidavit in a case alleging a series of voter fraud behaviors to benefit Joe Biden in the 2020 presidential election. Jesse Read more

Please Share: