Despite the Cataclysm of COVID-19 Shutdowns, Automotive Operations Had Successful Reopenings
The abrupt shutdown of U.S. automotive industry in March 2020 during the COVID-19 pandemic and continued stay-at-home orders through April led to fears that the pandemic would prevent resumption of industry operations for the foreseeable future. A survey of automotive industry executives conducted last month by Dykema, MICHAuto and The Right Place confirmed that 84% of the automotive company respondents were required to shut down their U.S. operations. About 50% of such respondents reported a required shut-down of operations in Mexico as well.
Given the widespread impact of the pandemic on the industry, plans for a re-start of regular operations were threatened by anticipated supply chain disruptions, incorporation of new worker safety procedures and favorable reception by employees, and intermittent shutdowns caused by positive COVID-19 cases. Although these obstacles may have stymied the endeavor, they did not prevent the automotive company respondents from successful reopenings. Despite certain well-publicized exceptions, survey results showed that the re-start of automotive operations went smoothly. Only 20% of automotive company respondents reported having to suspend operations after reopening for COVID-19 related issues, with only 5% having to suspend in Mexico or Europe.
“The smooth restart is a testament to the strength of Michigan’s automotive industry. OEMs and suppliers were not only able to pivot to manufacturing PPE equipment in the face of a global pandemic, but that the re-opening was organized, thoughtful, and implemented almost seamlessly,” said Glenn Stevens Jr., executive director of MICHauto and the vice president of Automotive and Mobility initiatives for the Detroit Regional Chamber. “In order for automotive to stay open and continue operations, we need other industries to follow suit in employing critical and smart safety measures, both at work and at play. That is what will drive a path to recovery.”
Use the links below to see all insights from respondents on how COVID-19 affected the U.S. economy and the automotive industry.
Dykema, MICHauto and The Right Place will host a webinar on August 13 at 11:00 a.m. ET to review the survey results and discuss the impact of COVID-19 on the future of the automotive industry. Click here to register. Should you have any questions or if you would like more information, please contact your Dykema attorney or any member of Dykema’s Automotive Industry Group.