LANSING - On May 18, UAW workers began returning to General Motors plants in Michigan to restart the production of automobiles, another milestone in the reopening of the state's economy.
Vehicles stopped rolling off the assembly lines in March when Gov. Gretchen Whitmer put her first stay-at-home order into effect.
About two weeks after workers return to Lansing's Grand River and Delta Twp. assembly plants, the facilities could be at full strength, delivering vehicles for the first time in nearly three months.
Yet the market those vehicles will enter is unrecognizable compared to the market that existed prior to the coronavirus outbreak.
"At the close of April, we were down over last April somewhere between 75% and 80%," said Terry Burns, executive vice president and secretary of the Michigan Automobile Dealers Association.
"That equates to somewhere north of $100 million dollars in sales tax to the state," he said. "And the month of May is trending almost the same; it's around 70% down from last May."
Like many industries, auto sales largely shut down after the outbreak and the resulting stay-at-home orders.
Dealerships were open mainly to service vehicles and with sales floors mostly closed, what car purchases occurred were completed mostly online.
"We're about half, maybe two-thirds of where we are normally," said Ralph Shaheen, president of the Shaheen Automotive Group.
Around 30% of Shaheen's nearly 400 employees are on furlough, he said.
Shaheen said his sales areas have been open, but with some changes.
"We've got partitions up in the sales area...(and) everybody wears a mask. We're doing the social distancing," he said.
"On the sales side, we were closed but our surface shops remained open for essential workers and obviously people that still needed a vehicle repaired," said Max Muncey, a spokesman for the LaFontaine Auto Group.
For the LaFontaine Auto Group, at least, May brought some good news.
"(In May), we've seen a great, great uptick (in sales); customers in need of new vehicles, leases that are up," he said.
"In some cases, we've seen people that needed a new vehicle because maybe they are an essential worker or (multiple) family members are essential workers and they needed to work in different shifts," Burns said.
"We are thankful for some of the sales that we were able to get but it doesn't come close to matching what we've done in previous Aprils," he said.
However, every vehicle that is sold is something of a catch-22 for the industry. Every sale depleted inventory but with manufacturing all but frozen, those inventories could not be replenished.
On Thursday, Whitmer announced that showrooms could reopen and dealerships are hoping that sales recover, but at a manageable rate.
"We still have pretty good inventory right now," Burns said. "And then once we're allowed to open up a little bit more we do expect some of that inventory to go down."
"We hope that our sales will increase at a number that will also allow us to begin getting new inventory back," he said.
At LaFontaine, there are teams monitoring inventory, Muncey said. "I'm sure they're a little more stressed than I am, just watching what's being built and what's moving off the lots," he said.
"I think some really good stuff may be a little low on inventory," Muncey said. "We haven't really started to feel a big pinch yet."
Chevy's popular pickup trucks may be harder to get later this year, Shaheen predicted.
"Right now we have enough merchandise," Shaheen said. "I think trucks, pickup trucks will be short, eventually."
Due to the required ramp-up time of both vehicle assembly as well as parts suppliers, Shaheen said supply chain issues might be inevitable.
"In the third quarter, we'll probably see a shortage of new vehicles," he said. "I don't see how that can be can be avoided really."
Projecting sales in coming months is difficult, Burns said.
"Sometimes the projections would change from two o'clock to five o'clock the same day," he said. "We can begin to project once we get back into the routine, a little bit. Once we can open the sales offices up."
However, Burns said that, at least for now, dealerships will be operating under the new sanitation and preventative protocols instituted in the wake of the outbreak.
"We're very accustomed to making sure we have barriers up in certain places," he said. "We've got sneeze guards, we've got the hand sanitizer, we are able to make sure everybody's social distancing. We've regulated the number of people that can come into the service area at one time."
"We've got some experience here, and we're able to incorporate that right into the sales process," he said.
Contact business reporter Christian Martinez at cmartinez@lsj.com or (517) 267-1342. Follow him on Twitter at @ChristianM_CA.
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What's ahead
As auto assembly resumes, it will take weeks to generate full production.
Lansing-area dealers say they are prepared to resume sales and have good inventory now.
Dealers do expect some popular models may be hard to get in coming months, as sales resume and production is not is not yet at full strength.
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