The next time many auto workers report to the plants, they might have their temperature taken at the door, fill out daily health questionnaires and wear vibrating wristbands to keep everyone a safe distance apart. But when exactly that day will come remains an expensive question.
Restarting production during the coronavirus pandemic is a moving target as auto makers and suppliers navigate ever-changing state-by-state restrictions, health and safety guidelines and the continued spread of the deadly virus.
After more than a month with virtually no output and therefore no revenue, companies are shaping their plans to restart, with many coalescing around an early May reopening of their North American plants. Mercedes-Benz was aiming to resume production in Alabama as soon as April 27, while other plants, especially those making less popular and less profitable vehicles, are expected to stay dark longer. Honda is expecting 100 percent output on most of its production lines by the week of May 11, according to someone familiar with production plans.
Hitting the right restart date will be crucial to prevent factory floors from becoming breeding grounds for the virus and to avoid a costly and chaotic start-stop production pattern.
"If they're not pumping out product to bring in revenue, that's going to be a problem at some point," Carla Bailo, CEO of the Center for Automotive Research in Ann Arbor, Mich., told Automotive News. "They still have to pay people, which means money is just going out the door for some of them to do nothing."
The coronavirus outbreak has delayed production and launches, prompting auto makers to max out credit lines and suspend shareholder dividends to build up a cash cushion.
Ford Motor Co. and General Motors could survive into the fall after their credit line draws left each with at least $30 billion, according to Morningstar. But if the shutdown lasts that long, which Morningstar doubts, that survival would be a painful one. Ford, last week, said it expects a net loss of about $2 billion for the first quarter—a period in which U.S. production wasn't affected until the last two weeks.
When the plants reopen, workers will be subject to vastly different health and safety policies from before. At least two dozen UAW members in the auto industry were known to have died from COVID-19 as of last week.
"If this is going to work, we need to do this right. And importantly the return to work date should be dictated by the science of the contagion curve, not economic factors," UAW President Rory Gamble said in a statement. "If we do this wrong, we all will only have a prolonged economic hardship."
The Detroit 3 and UAW created a joint coronavirus task force last month to coordinate plant shutdowns and plans to protect workers. The task force also could adjust sick-day policies so workers are more inclined to stay home when they feel ill and self-report contact with someone who has the virus.
The auto makers and the UAW are working on advanced safety protocols that have been effective at factories where small numbers of workers are making ventilators and respirators to treat the virus. All of the Detroit 3 are likely to take virtually identical approaches.