GENERAL MOTORS(GM)

• GM was forced to shut production operations at two of its key manufacturing plants. The two-month factory shutdown led to a squeezed supply chain leading to part shortages.

• The company also announced the cancellation of its scheduled overtime work at its SUV plant in Arlington, Texas. Its Corvette plant, which is located in Bowling Green, Kentucky, was put under a temporary shutdown.
• The shutdown of several of its auto plants led to record job losses and limited the supply of its vehicles to dealerships; thus, sales were hit hard. The company realized a 34% sales drop and announced its plans to cut 700 jobs at its Tennessee plant because of the drop in demand for SUVs manufactured there.

• All General Motors employees must go through a health screening that includes a temperature check and stand at least six feet apart to conform to social distancing guidelines. The company also uses apps to prevent infected people from reporting to work. Acting GM Chief Financial Officer John Stapleton stated that such steps to follow COVID-19 instructions have made it impossible to get back to normal production levels. As quoted, "Inventory levels will remain lower” than a year ago through at least the end of 2020."
• GM wanted to reopen its plant in Detroit on 18th May 2020, but the Michigan Government stay-at-home orders were still in effect, and this proved to be a major stumbling block in the resumptions of operations.

FORD

• Ford wanted to reopen its plant in Detroit on 18th May 2020, but the Michigan Government stay-at-home orders were still in effect, and this proved to be a major stumbling block in the resumptions of operations.
• The pandemic forced Ford to shut down its plant in Louisville, Kentucky, due to a shortage in Microsoft computer chips storage supply from Microsoft. This was predicted to spread to other auto plants in the following months.
• The global semiconductor(chips) shortage due to COVI-19 has led to Ford also closing down its Ohio Assembly Plant in Avon Lake.
• CNBC reported that Ford realized a 33.3% decrease in vehicle sales after shutting down factories and its dealerships due to COVID-19 in its second quarter, as this caused customers to stay home. Ford reported a 14.3% decline in retail sales in the second quarter. This also coincided with a 0.4% decline in truck sales and a 22% drop in SUVs.
• As a result of the depressed sales and production due to the COVID-19 pandemic, Ford was expected to realize a $2 billion net loss in its first quarter. The company also estimated a $600million pretax loss and a 16% revenue decline for the quarter.
•  On 30th April 2020, Ford signaled that it was ready to commence production operations as soon as the stay-at-home orders are lifted. Jim Farley, Ford's chief operating officer, stated that"We've been working intently on how to restart our operations and safely bring back our employees, and we're ready."
•  Social distancing guidelines are adhered to by ensuring that employees are six feet apart and go through temperature checks. All employees must wear masks. Before going to work, each employee must certify their health through an online form on a daily.

Toyota

• On March 18, 2020, Toyota announced suspension of all activities in North America, including the U.S., Canada, and Mexico. This entailed temporarily shutting down all components and automobile plants. Toyota, however, reported that the safety and health of its employees, as well as market declines, were the main reasons for the shutdown.
• Production was expected to resume on March 25, 2020, but Toyota extended the closures to April 6, 2020, then to May 4, 2020, and later to May 11, 2020, when the automaker began to gradually resume its production operations in North America. Toyota reported that the resumption would be gradual and in accordance with the Federal government's safety and health guidelines, as well as state and local ordinances. The automaker also said that it had implemented protocols in its North American manufacturing facilities in a bid to stop the spread of COVID-19, and that it will follow all set safety guidelines.

Stay-at-home Orders

• Toyota significantly reduced the number of staff at its North American headquarters in Plano, Texas, due to COVID-19 restrictions. Toyota Motor's North American Chief Administrative Officer (CAO) reported that the company was changing its operations, both in Plano, Texas, and in its dealerships and plants.
• The stay-at-home orders implemented in mid-March forced Toyota to significantly reduce the number of employees at its headquarters, from 4,000 to 60. This number was later increased to 200 as of July 2020. The CAO stated that most returned employees worked in quality labs, and that its employees would continue working remotely for the foreseeable future.

Social Distancing

• Toyota Motor's CAO also acknowledged that it could not allow all employees to return to work due to social distance guidelines. As a result, the automaker decided to reconfigure office spaces to allow work teams to meet weekly, or after several weeks, while handling most of their tasks remotely.
• Consequently, the automaker installed plexiglass barriers around workstations at its offices. It also installed plexiglass barriers between bathroom sinks, and considered more advanced measures such as voice-activated doors. Returned employees were also required to fill out daily health assessments.
• Toyota North America's VP of Sales reported that Toyota allowed 8,400 of its employees in the U.S. to work remotely in order to adhere to social distancing recommendations.

Specific Restrictions

• The VP of Sales stated that automotive, especially servicing, is an essential business, although Toyota's servicing business operated on recommendations from local, county, or state governments. He noted that 600 of Toyota's 1,800 dealerships in North America were closed due to government restrictions, and the ones in states where dealerships were operational operated with partial staff in adherence with the CDC's social distancing recommendations. Dealerships also began picking up cars for servicing to reduce traffic in their locations.
• Toyota's North American CAO also pointed out that operations in the company's U.S. factories were altered with assembly-line activities shielded and spread out to maintain social distancing guidelines. While this affected production volumes, the company developed strategies to increase production.

Disruptions and Shortages

• The CAO said that COVID-19 protocols had complicated Toyota's plant operations, which had consequently depleted the company's dealer lots. This forced the automaker to run its San Antonio plant in "maximal overtime" to meet demand. In October, the automaker reported that its North American production was back to 94% capacity, and that it expected to fill its pipeline by end of 2020.
• The company's Parts Supply Chain General Manager said that Toyota experienced uncontrollable supply chain issues when government policies affected the production capacities of suppliers. The disruption caused supply abnormalities, according to the executive. In response, the automaker made changes to improve its supply chain systems.

Fiat Chrysler (FCA)

• On March 18. 2020, FCA announced the temporary suspension of its North American production activities, including six in the United States. At the time, the automaker attributed the closures to an agreement made with the United Auto Workers association. Before then, FCA had required production workers to continue reporting to its facilities, with only a few employees working from home.

Social Distancing and Stay-at home

• Michigan's Governor (where FCA's U.S. activities are mainly based) issued an executive order on March 23, 2020, which was later extended effective April 9, 2020. The order forced businesses to suspend operations in adherence to the issued social distancing and stay-at-home orders.
• Since automotive manufacturers were not among essential businesses in the state, FCA was forced to extend the closure of its production facilities. It was not until May 11, 2020, that Michigan's Governor allowed the state's manufacturers, including FCA and other automakers, to resume operations.

Specific Restrictions

• Upon rescinding the aforementioned restrictions and allowing automotive manufacturers to resume factory operations, Michigan's Governor issued a new order that required them to adopt protective measures such as daily screening, touchless temperature screening, and protective gear such as face masks.
• FCA resumed operations on May 18, 2020, albeit with safety measures such as plastic shielding, social distancing enforcement, COVID-19 screening, and temperature checks. The company also reduced the number of shifts in its production plants.

Disruptions and Shortages

• The Michigan shutdown had hindered efforts by FCA to restart its vehicle assembly/production anywhere in the country since many crucial parts suppliers are based in Michigan. As a result, the automaker's overall production levels and supply chain were disrupted due to the restrictions imposed in Michigan.
• On June 19 2019, CNBC reported that FCA has resumed pre-COVID-19 production levels. The return to two-shift schedules would enable the automaker to meet the high consumer demand for SUVs and pickups. However, the company faced production pauses due to employee walkouts in several of its facilities, and increased absenteeism due to COVID-19 infections.

Honda

• Honda implemented screening measures, frequent sanitization, and social distancing practices, "like staggering lunches, and offering associates the opportunity to work remotely when possible" when the pandemic began.
• The company suspended its production in the US on March 23, 2020, owing to stay-at-home orders and gradually started reopening its automobile, engine and transmission plants from May 11, 2020, onward. Honda "staggered the start-up at each plant, with most plants using the first day to ensure that front-line leaders are trained on new procedures and activities related to COVID-19 prevention."
• The company also implemented staggered shift start times, staggered lunch and break time, "adjusted processes to achieve social distancing on the production line," and made capacity chances to common areas to maximize social distance.
• As a result of the pandemic, Honda faced temporary staffing issues that required office workers to fill in empty slots (owing to Covid infections of workers or their family members) on its production lines.
• While Honda saw sales recover in May and the consumer demand did not slump as much as expected in the following months of 2020, the plant shutdowns and staffing issues resulted in a supply constraint.
• Honda saw its US YoY sales decline by 17.31% in 2020. The market share of the company fell from 8.52% in 2019 to 8.18% in 2020.
• "The impact from COVID-19, congestion at various ports, the microchip shortage and severe winter weather" resulted in Honda temporarily halting production at its US and Canada plants for a week beginning 17th March 2021. Honda typically produces about 30,000 vehicles a week in the United States and Canada. The production issues hit Honda plants in Ontario, Ohio, Alabama, and Indiana."
• The two-month lockdown owing to the Covid pandemic resulted in a shortage of silicon chips, for which the auto industry competes "with the sprawling consumer electronics" that saw sales of "computers explode during lockdowns."

Hyundai/ Kia

• Hyundai Motor Manufacturing Alabama (HMMA) "initially suspended production on March 18, 2020" when one of its workers was diagnosed with Covid-19. "Kia's Georgia factory--manufactures the full-size Telluride SUV--which sources engines from the Hyundai facility, also suspended production" on March 30, 2020.
• Hyundai followed "ADPH’s protocols for disinfecting the affected work area" and deployed "additional sanitation measures across the entire facility. Approximately 100 team employees remained on-site each day to support essential functions," during the shutdown period.
• "Hyundai shipped 33,990 vehicles to the U.S." in March, 4.3% more YoY. As dealerships in the US were shut, the "consignment of cars that came over from South Korea" sat at U.S. ports long enough for Hyundai to suspend a "Tucson production line in South Korea for five days."
• "Alabama Governor Kay Ivey had issued a stay-at-home order until April 30, 2020," post which both Hyundai resumed operations on May 4th 2020 (and so dd Kia). Hyundai started with full production on one shift and added additional shifts in the following weeks. However, the resumption of production only revived over a week or more as hundreds of auto parts supplier factories geared up across North America.
• Hyundai "implemented extensive protocols to provide safe, secure and sanitized workspaces for all team members." These proactive measures included "pre-screening for temperature; physical distancing guidelines in workstations and break areas; staggered shifts; expanding existing cleaning protocols and health and safety communication materials."
• Hyundai dealerships offered digital retailing, home delivery of new vehicles, "pick up and drop off the customers’ vehicles for service and repair, and electronic signature authorization for repair approvals." Hyundai also provided "Clean Assurance guidelines" to all dealerships that included cleaning protocols, social distancing measures, and dealer training to "help safeguard the health of customers and employees."
• Hyundai Motor America "sold 622,269 total vehicles in 2020, a 10%" YoY decline. However, it increased its market share from 4.05% in 2019 to 4.23% in 2020.
• Hyundai, Kia, and Toyota were the only automakers to "to have maintained a stockpile of low-tech chips that helped them keep up production. Since Hyundai kept buying from chip makers and global auto parts suppliers such as Bosch and Continental before the shortage worsened, they also managed to keep costs down."
• However, the chip shortage is expected to affect Hyundai from April 2021 onward. The company has already stopped "overtime and weekend production of less-popular models."

Nissan

• Nissan USA temporarily suspended operations at its manufacturing plants from March 20, 2020, due to efforts aimed at containing the spread of COVID-19. Essential business activities continued to operate with improved safety measures.

• The shutdown affected around 7,250 employees at the company's assembly plant in Smyrna, Tennessee, and 5,200 employees at the Canton, Mississippi plant. About 1,700 employees were also affected by the closure of the powertrain assembly plant at Decherd, Tennessee.
• Nissan temporarily laid off around 10,000 U.S. hourly employees from April 6, 2020.
• According to a Nissan spokesperson, "The company is implementing temporary layoffs to help manage the business where activity is reduced. Affected employees will be eligible to apply for government support such as enhanced unemployment benefits."
• Nissan directed its employees who can work remotely to do so, as it commenced a phased restart of its U.S. production activities in early June.
• The company implemented comprehensive COVID-19 measures to provide a safe environment for its employees, including "health self-certifications, personal protective equipment, enhanced disinfection protocols for workstations and common areas, and facility modifications to support social distancing".
• In the first quarter of 2020, Nissan experienced a 30% drop in sales sagged 30% as businesses were forced to close by the COVID-19 pandemic and consumers sheltered in place.
• Among the automakers who reported their numbers, Nissan and Infiniti saw the worst decline of the second quarter of 2020 with a 49.5% decrease in 2020 sales compared to 2019. Murano sales were virtually the same with 2019, and 370Z sales were up by 24%. Most of the other Nissan models sales declined, but none was worse than the electric Leaf and the Versa, which both experienced a 68% fall. Overall, Nissan and Infiniti saw a 61% drop in car sales and their truck sales reduced by 41%.

 

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Subaru

• Subaru of America closely followed the guidelines and recommendations provided by the Centers for Disease Control and Prevention's (CDC) on the actions to be taken to curtail transmission of the COVID-19 virus. The company encouraged its employees to work remotely.
• Subaru shut down its manufacturing plant in Lafayette, Indiana due to COVID-19 from Monday, March 23, 2020. Subaru Indiana Automotive (SIA) which accounts for around 52% of Subaru of America’s vehicle sales manufactures the 2020 Subaru Outback wagon, Ascent family hauler, Legacy sedan, and Impreza compact sedan and hatchback.
• SIA stated, “In response to COVID-19, we are temporarily suspending production from March 23-29. Only limited personal will be working on-site during the shutdown.”
• Subaru extended the shutdown of its Indiana plant in May as a result of decline in market demand and supply chain challenges related to the COVID-19 pandemic.
•  The company furloughed its production workers in Lafayette, Indiana. The plant engages around 5,300 workers.

• In the second quarter of 2020, Subaru saw a 25.3% decline in sales compared to 2019. However, Subaru's senior vice president of sales, Jeff Walters, noted that even "in the midst of a competitive market limited by the pandemic, the Forester continued to shine”. That’s because the Forester had its best June ever, selling 19,490 units last month.
• As the US, which is Subaru's biggest market with two-thirds of its vehicle sales, struggles to control the COVID-19 outbreak, the company produced only about 5,000 units in May 2020, a fraction of 40,000 units which was produced in 2019.
• Subaru reported about 54,000 vehicle sales in June 2020, a 12% drop compared to the same month in 2019. That followed declines of 47% in both March and April and 19% in May. Its year-to-date sales through June decreased by 21% to 267,110 vehicles. Jeff Walters, the firm's senior vice president of sales, stated, “Our March sales reflect the current trends in the marketplace, with government guidelines around social distancing and stay-at-home orders limiting car buying across the board,”.
• The company reported that year-to-date sales through June dropped for all of its models, including over 30% declines for Impreza, Legacy and Outback models.

 

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Volkswagen

• On March 19, 2020, Volkswagen announced the temporary shut down of its manufacturing plant in Chattanooga, Tennessee for one week due to COVID-19. Following the CDC directives on social distancing and other health and safety measures, the company implemented social distancing procedures in business-critical training and postponed all non-critical training and classroom activities.
• The company later extended the shutdown of its Chattanooga plant to April 5. Volkswagen also adopted telework for office staffs and charged employees to self-quarantine and maintain social distancing as directed by the CDC.
• The company temporary furloughed 2,500 employees of its production and maintenance workforce and pledged to continue to provide health care benefits, coverage of premiums and earned bonuses to employees.
• The automaker again moved the resumption of operations for its Chattanooga manufacturing plant to May 3, following newly-lifted restrictions from the State of Tennessee and Hamilton County. 90 new measures were implemented to limit contact and help ensure a safe working space. "These measures include: providing new personal protective equipment, including masks and gloves; implementing temperature checks upon entrance; establishing six-foot distancing barricades and floor markings; ceasing shuttle transportation; increasing disinfection frequency of all contact surfaces, such as machinery and door handles; and replacing plated cafeteria meals with packed lunches."
• The factory resumed operations on May 17. According to Tom du Plessis, CEO of Volkswagen Chattanooga, the plant resumed at 50% production capacity.

Supply Chain Challenges

• Volkswagen's faced challenges in its supply chain due to the pandemic resulting in the scarcity of imported parts from its suppliers. The company had difficulty transporting parts from its suppliers to the Chattanooga plant and had to improvise by transporting the parts on flights from China and put on trains to Detroit and then flown directly to the plants.
• Volkswagen was forced to halt or slow production as a global shortage of computer chips crippled auto-part suppliers in the latest blow dealt to the car industry by the coronavirus pandemic. The chip shortage affected production at its plants in China, North America and Europe.
• Scoot Keogh, CEO and president of Volkswagen Group of America described the disruption to its supply chain as chaotic. According to the CEO, "it was ragged. Yes, chaotic. Yes, we had to do things like put parts on airplanes" to keep assembly lines running."
• Due to coronavirus business shutdowns, VW U.S. sold 325,784 vehicles in 2020 which was 10% lower than the previous year despite losing eight weeks of production at its plant in Chattanooga, Tennessee. According to the CEO, Volkswagen ended the year on an upbeat note, with the best fourth-quarter sales since 2014 and the best December sales since 2012.

Tesla

• "Tesla stopped production at its US factories in mid-March as counties and states around the country introduced shelter-in-place orders meant to stop the spread of the virus." Tesla's New York solar panel factory and Nevada Gigafactory were shut down and later reopened.

• Following the coronavirus shelter-in-place order in the San Francisco Bay Area, Tesla was forced to suspend normal operations at its Fremont, California factory. The company initially defiled the stay-at-home order by keeping its factory running as of March 17 until it was ordered to shut down.

• On May 13, 2020, Tesla reached an agreement with Alameda County, California where its assembly plant is located to reopen. The company was expected to follow health and safety guidelines which include social distancing.
• Tesla released a Return to Work Playbook to keep workers returning to the factory safe. The measures include social distancing, temperature screenings, the installation of barriers to separate work areas and protective equipment for workers.
• At its Gigafactory in Nevada, Tesla reduced its on-site staff by roughly 75% due to the coronavirus.

Supply Chain Challenges

• According to Elon Musk, CEO of Tesla, the company temporarily stopped production at its Fremont, California factory due to parts shortages. The shut down was for two days and operations was resumed on February 26.
• Facing supply chain issues, Tesla temporary paused production of its Model 3 between February 22 and March 7. In February, the company also admitted to having capacity issues at ports and semiconductor shortages, thereby affecting its supply chain. According to sources, "backlogs at ports and severe snow storms affecting ground transport have caused some of the supply-chain issues" the company was facing.
"Tesla delivered 499,550 vehicles in 2020, slightly missing its most recent guidance of 500,000 vehicles" despite the impact of coronavirus. The company has initially set a goal of delivering between 477,750 and 514,500 cars for 2020.