In less than two weeks, Detroit’s automakers, their suppliers and the United Auto Workers hope to begin restarting complex manufacturing operations — and they need to get it right.
A false start marred by supply interruptions or an unfortunate outbreak of COVID-19 on the plant floor could scuttle a restart before it gains momentum. That would have far-reaching implications, starting with the confidence of the men and women returning to plants after a roughly two-month hiatus.
Two organizations representing auto suppliers told Gov. Gretchen Whitmer in a letter last Thursday that continued delays in an industry restart would "pose increasing liquidity issues for suppliers and jeopardize long-term capital investment and employment for Michigan," according to the Original Equipment Suppliers Association and the Motor & Equipment Manufacturers Association.
One risk: Suppliers could "look to move products and employment to a location allowing them to support their global customer base. The future of our workers, our industry, and our state depends on the industry’s collective ability to ramp up vehicle and parts production in a safe and effective manner. It is time to establish a path forward for all."
Translation: The industry needs a timetable for restarting, governor, and it needs it now. Suppliers say they should restart component production five days before automakers to ensure timely delivery of parts and subsystems to assembly plants, meaning supplier production under comprehensive COVID-19 workplace protocols could begin as early as next Monday.
General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV are eyeing Monday, May 18, to begin the process of restarting operations. They plan to slowly ramp up production starting with single shifts, as rank-and-file members adopt new hygiene standards and workplace practices intended to keep the COVID-19 pandemic outside.
The complexity is mind-boggling. Demonstrating the plants can be operated safely amid COVID-19 should help build the confidence of both hourly employees and management, as well as investors hungry for clues that major players in key sectors like the auto industry can adapt to a new normal.
Many of the proposed safety protocols already are being used — by GM and Ford plants in China, by FCA plants in Italy, by GM and Ford components operations in Michigan and Indiana producing masks, face shields and ventilators with paid volunteers drawn from the ranks of temporarily idled UAW members.
The prevailing sense is a sort of, "We know how to do this." That's because, to a limited extent, they already are ... with union labor in existing facilities. But large-scale production awaits in a state ranked among the top three or four in both total cases and total deaths attributed to the virus. Quelling uneasiness over such facts is why the automakers are producing such detailed safety protocols and sharing them with their employees, the public and the news media.
"During this time of unprecedented global crisis, we know that what people want most is answers, especially when it comes to returning to work," GM CEO Mary Barra and Jim Glynn, vice president of global workplace safety, wrote in the introduction to the automaker's "Returning to Work with Confidence" COVID-19 playbook. The goal is to provide "assurance that robust protocols are being implemented so they can return to work with confidence."
Intricate, often just-in-time supply chains crossing state and international borders must reckon with varying public-health orders in states and at least three countries — Canada, Mexico and the United States. And no single U.S. state boasts more vehicle production than Michigan, also one of the states hit hardest by both reported infections and deaths.
Restarting vehicle and parts production is a critical precondition to reviving the state's economy, to restoring sagging tax revenue, to easing pressure on the over-burdened unemployment insurance system, to enabling dealers and automakers to test market demand with costly incentives and longer-term financing with essentially zero borrowing costs.
Moving ahead with a transparent schedule is critical, and getting it right is as much good politics as it is good business. With the help of the UAW, Detroit's automakers leveraged their engineering and manufacturing heft to design and build medical supplies — now they need a chance to show they can adapt their manufacturing for the age of COVID-19.
daniel.howes@detroitnews.com
(313) 222-2106
Daniel Howes’ column runs most Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN. Or listen to his Saturday podcasts at detroitnews.com or on Michigan Radio, 91.7 FM.
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