U.S. Automakers Shutter Manufacturing Plants

Detroit automakers are shutting down production. Ford Motor Co. (NYSE:F), General Motors Co.(NYSE:GM) and Fiat Chrysler (NYSE:FCAU) each said that they are temporarily closing all of their North American factories due to the coronavirus threat. Ford said its plants will shut down after Thursday evening shifts, through March 30, while GM said it will begin a “systematic orderly suspension” of production through at least March 30. Operations will be evaluated weekly after that.


Ford said in its statement that it will work with leaders of the United Auto Workers union in the coming weeks on plans to restart factories, as well as exploring more procedures to prevent the virus from spreading. The union has been pushing for factories to close because workers are fearful of coming into contact with the coronavirus.


The companies’ decisions reverse a deal worked out earlier this week in which the automakers would cancel some shifts so they could clean equipment and buildings but keep factories open. But workers were still fearful and were pressuring the union to seek full closures.


Ford said it closed an assembly plant in the Detroit suburb of Wayne, Michigan, on Wednesday after a worker there tested positive for the coronavirus. The company said it is thoroughly cleaning and disinfecting the building. Production will be halted through March 30, the company said.


Honda Motor Co. (NYSE:HMC) announced Wednesday morning that it will temporarily close its North American factories for about one week starting on Monday, and that put additional pressure on Detroit automakers.The move by General Motors, Fiat Chrysler and Ford will idle about 150,000 auto workers.


They likely will receive supplemental pay in addition to state unemployment benefits. The two checks combined will equal what the workers normally earn. Automakers have resisted closing factories largely because they book revenue when vehicles are shipped from factories to dealerships. So, without production, revenue dries up.


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