Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Automakers announce work-from-home policies and production impacts as COVID-19 virus outbreak worsens in Spain, Italy and US
16 March 2020Stephanie Brinley, MBA
Over the weekend of 13 March, announcements continue to roll in
regarding changes in working policies for salaried staff as well as
increasing production impacts in Italy, Spain and the US.
FCA
Further to previously announced stoppages Fiat Chrysler
Automotive (FCA) has said that it will stopping almost all
production in Europe for the next two weeks. The OEM will close all
six Italian factories that build Fiat, Jeep, Maserati, and Alfa
Romeo products. The company is also shutting down Fiat Auto Poland
(FAP) and its Serbian plant which builds the Fiat 500L. Meanwhile
FCA CEO Mike Manley is encouraging all office-based employees to
work remotely in an effort to combat the spread of the coronavirus
disease 2019 (COVID-19) virus. The programme is designed to be
flexible to allow for a mix of remote and on-site work, according
to a spokesperson.
Ford to idle Valencia plant
Ford announced on 15 March 2020 that it will close its Valencia
(Spain) auto assembly plant for one week after three employees
tested positive for COVID-19. The company statement said, "We have
had three positive cases of COVID-19 in the Ford Valencia plant in
the past 24 hours," and Ford followed protocol by isolating all
employees who had contact with the infected workers. The Ford
Valencia closure, however, is among the few reactions specifically
to employees testing positively.
Ferrari idles Maranello and Modena, Brembo closes
Italian plants for one week
Ferrari issued a statement on 14 March suspending production at
Maranello and Modena (Italy) until 27 March 2020. The statement
reads, "The decision has been taken by the Company for its
employees' well-being and follows a number of rigorous preventive
measures already implemented by the Company to guarantee the
highest health standards in light of the Italian Government's
decree on COVID-19 issued on March 11, as well as previous decrees.
The Company, that had ensured continued production so far whilst
placing employees' wellbeing as its main priority, is now
experiencing the first serious supply chain issues, which no longer
allow for continued production. All non-manufacturing-related
activity will continue on a regular basis, leveraging the
opportunities provided by smart working." Smart working is the term
Ferrari employs for working from home.
On 13 March 2020, Brembo announced it would close all four
Italian plants for cleaning. In a statement, the supplier said the
plants will be closed from 16 to 22 March 2020, given "the
evolution of the COVID-19 pandemic and consequent objective
inability to operate with continuity."
Renault and Nissan's Spanish plants
affected
Reuters reports that Nissan's two Barcelona (Spain) plants
stopped work on 13 March 2020 because of a nearby wheel supplier's
COVID-19 virus impact. The Nissan facility does not operate at the
weekend, and the closure was expected to run until at least Monday
16 March; between the facilities, about 3,000 employees are
affected. In addition, Renault plants in northern Spain will halt
production for at least two days during the week of 16 March 2020,
also because of a lack of components. A Renault spokesperson is
quoted as saying, "[Thursday] we had no problems, and now we have
to stop for two days from Monday in Palencia and Valladolid," as
result of supply chain setbacks in Catalonia. The Renault sites
employ about 6,000 people.
VW to close US plant for one day; SEAT to close
Martorell for up to six weeks
Volkswagen (VW) is closing its US assembly plant for one day on
16 March as a precautionary measure, according to Automotive
News. The move will allow for deep cleaning of the plant as a
precautionary measure against the spread of the COVID-19 virus. VW
is quoted as saying, via email, that the shutdown will "allow plant
employees time to make arrangements for child care during the
two-week school closure there. This will be paid time off. We will
also take this time to augment the already increased sanitary and
deep-cleaning measures undertaken at our facility."
According to Reuters, VW division SEAT's Martorell plant is
experiencing production and logistics problems related to the
COVID-19 virus outbreak. The report notes that the 7,000 employees
may see temporary layoffs. A union leader at SEAT reportedly told
Reuters the stoppage could last up to six weeks.
US auto industry begins widespread work-from-home
arrangements
In the US, the federal government and several states have issued
states of emergency relative to the situation; what this means in
practical terms is that government agencies have faster access to
funds and resources for combatting the situation. Many school
districts have closed through various dates in April and many local
jurisdictions are restricting gatherings to under 250 or so people
and encouraging people to stay at home and implement "social
distancing." The actions are not unlike some containment efforts in
China, South Korea, Japan, Italy, and Spain, but have resulted in a
number of automakers and suppliers issuing statements on
work-from-home policies. Tesla has ordered its 30 US employees
working on the Berlin factory in Germany to return the US as
well.
GM, Ford and FCA CEOs issued work-from-home advisories for
global salaried staff, beginning on 16 March 2020, with no end date
advised. All have also noted that the work-from-home policies
already applied to operations including China, Italy, and Japan. GM
CEO Mary Barra's statement noted that for areas of the company
unable to work remotely (manufacturing, global product development,
customer care and after sales services) schedules are being
adjusted for additional cleaning. Ford CEO Jim Hackett noted,
"Since the coronavirus issue is rapidly diminishing in China and
our team there already has begun to return to work, this action
does not apply to our team in China." At FCA, CEO Mike Manley
instructed staff on 12 March 2020, with the email reported by
Automotive News. Manley says FCA is "accelerating the
deployment of working remotely... At our offices in China, Korea,
Japan and Italy this practice has become the 'new normal.'" FCA has
also "introduced a very strict policy on external visitors at FCA
sites." For US operations at BMW, Nissan and Mercedes-Benz,
work-from-home protocols have been initiated, most as of 16 March
2020. Toyota, VW and Honda have not yet shifted to work from home
protocols, but have taken measures that include reduced travel and
meeting size as well as more frequent sanitisation. Honda has
instituted screening measures for visitors to its sites, and Toyota
noted it is considering a work from home alternative. Suppliers
instituting work from home measures include ZF North America and
Adient; Delphi and Denso were evaluating the situation at time of
writing, but had not yet shifted to working from home.
Outlook and implications
As COVID-19 virus concerns slowly ease in China, they are
accelerating in other regions. Reports of closures are increasing
as more countries also impose efforts to restrict movement, looking
to slow the spread of the COVID-19 virus and incidents of the
disease. Spain has imposed a 15-day state of emergency, while in
the US federal government and several states are restricting
gatherings, closing schools and imposing states of emergency. At
the same time, the situation in China is improving, suggesting that
while the next months are likely to be difficult, there is reason
to expect an eventual return to normality. In the meantime, IHS
Markit continues to adjust production and sales forecasts in
reaction to the immediate situation.
These moves follow global spread and the World Health
Organization (WHO) naming the COVID-19 virus a pandemic. That shift
in definition means that the disease has spread globally, according
to the WHO; it did not change the agency's protocol recommendations
for quarantine or safeguarding health. However, the change has
prompted businesses and governments across the globe to minimise
contact and congregation. Even as the Americas and Europe are
locking down, however, there are signals that the situation is
abating in China, with Honda and Toyota reopening some plants.
Among the reasons for Spain to see an accelerating impact is
that on 13 March, the country announced that a 15-day state of
emergency would start on 14 March; Italy imposed a lockdown earlier
in the month. These are likely to be followed by other production
impacts, with impact on Italy and Spain growing in recent days.
With our 12 March report, we noted on the highly integrated
global supply chains used by OEMs and Tier-1 component
manufacturers, the extended stoppages in China and the subsequent
slow ramp-up there are likely to have left gaps that can not
necessarily be filled from existing stock or elsewhere. It also
remains to be seen whether the impact of the COVID-19 virus
outbreak in the rest of Europe ends up being as significant as that
in Italy, although as noted, Spain implemented a state of emergency
on 14 March. If the outbreak is as significant across Europe as in
Italy and other countries implement similar measures, the impact on
both sales and production may grow. IHS Markit is currently
expecting to cut its European light-vehicle production forecast for
2020 by between 500,000 and 600,000 units in our next forecast
round, of which between one-third and one-half is related to the
COVID-19 virus outbreak. We continue to monitor the situation and
provide further updates to our forecast as it develops.
In the US, the VW closure is the first assembly plant shutdown
in the US related to containing COVID-19 and is brief. Although the
VW move is precautionary, there is potential for other OEMs to take
similar decisions and for disruption of the supply chain to create
further production disruptions. VW has not reported any employees
at its Chattanooga facility testing positive for the virus at time
of writing, as FCA announced earlier.
Posted 16 March 2020 by Stephanie Brinley, Principal Automotive Analyst, S&P Global Mobility
Read more articles like this one. Get a free trial to AutoIntelligence Daily
The above article is from AutoIntelligence Daily by IHS Markit. Every working day, AutoIntelligence Daily provides about 30 articles focused on automotive news, events and trends. Get a free trial.
Discover different consumers' preferences within the US market. S&P Global Mobility provides diversity data (ethnic… https://t.co/iO0h9eaodb
May 25
{"items" : [
{"name":"share","enabled":true,"desc":"<strong>Share</strong>","mobdesc":"Share","options":[ {"name":"facebook","url":"https://www.facebook.com/sharer.php?u=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fautomakers-announce-workfromhome-policies.html","enabled":true},{"name":"twitter","url":"https://twitter.com/intent/tweet?url=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fautomakers-announce-workfromhome-policies.html&text=Automakers+announce+work-from-home+policies+and+production+impacts+as+COVID-19+virus+outbreak+worsens+in+Spain%2c+Italy+and+US+%7c+IHS+Markit+","enabled":true},{"name":"linkedin","url":"https://www.linkedin.com/sharing/share-offsite/?url=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fautomakers-announce-workfromhome-policies.html","enabled":true},{"name":"email","url":"?subject=Automakers announce work-from-home policies and production impacts as COVID-19 virus outbreak worsens in Spain, Italy and US | IHS Markit &body=http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fautomakers-announce-workfromhome-policies.html","enabled":true},{"name":"whatsapp","url":"https://api.whatsapp.com/send?text=Automakers+announce+work-from-home+policies+and+production+impacts+as+COVID-19+virus+outbreak+worsens+in+Spain%2c+Italy+and+US+%7c+IHS+Markit+ http%3a%2f%2fihsmarkit.com%2fresearch-analysis%2fautomakers-announce-workfromhome-policies.html","enabled":true}]}, {"name":"rtt","enabled":true,"mobdesc":"Top"}
]}