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Coronavirus Business Fallout: Auto giants close factory gates, shut production

Several auto giants across America including - Toyota, General Motors, Ford, Fiat Chrysler, Honda, Nissan and Hyundai - have shut production in their factories to stop spread of deadly coronavirus. The total COVID-19 positive cases across America has crossed 13,700. At the time of writing this report, America's most populous state, California announced a complete lockdown, ordering its 40 million population to "stay at home".

India TV Business Desk India TV Business Desk
New Delhi Updated on: March 20, 2020 9:01 IST
Coronavirus Business Fallout: covid19 coronavirus, auto giants, tesla, nissan, general motors
Image Source : AP

Coronavirus Business Fallout: A horse-drawn cart transports old goods in Soweto, South Africa, Thursday, March 19, 2020. More auto companies across the United States and globe have announced production halt in view of coronavirus pandemic.

Several auto giants across America including - Toyota, General Motors, Ford, Fiat Chrysler, Honda, Nissan and Hyundai - have shut production in their factories to stop the spread of deadly coronavirus. The total COVID-19 positive cases across America has crossed 13,700. At the time of writing this report, America's most populous state, California announced a complete lockdown, ordering its 40 million population to "stay at home". In size, California is the United States third largest and is home to cities like San Francisco, Los Angeles, San Diego, San Jose and capital Sacramento among others. California is America's largest sub-national economy. The fallout of the lockdown can be estimated from the fact that California would have been the fifth-largest economy in the world if it was a country. Economies across the world have started showing mass disruptions as more and more companies joined the lockdown against Coronavirus. 

FACTORED OUT: News agency AP reported more companies were closing factory gates a day after the top U.S. automakers announced a total production shutdown in North America. Electric vehicle maker Tesla Inc. is indefinitely suspending production at its assembly plant in Fremont, California, at the end of the day Monday. The company says it followed federal guidelines in staying open even though seven Bay Area counties have ordered residents to shelter in place. Alameda County on Tuesday night declared Tesla a “nonessential business" under the county's shelter-in-place order, but the Fremont factory kept producing. On Thursday, Tesla said it would shut down except for basic operations. The company said its solar factory in New York also will temporarily suspend production, but its battery plant in Nevada and other operations will continue. 

Subaru is temporarily closing its only U.S. factory out of concerns for worker safety due to the coronavirus, as well as to adjust for falling sales. The Japanese automaker says the plant in Lafayette, Indiana, will shut down on Monday and remain closed for at least a week. All workers will be paid for the week. The plant has about 5,700 workers. 

Kia and Volkswagen also said they would suspend production at their U.S. factories. The 2,700-worker Kia plant in West Point, Georgia will be closed Thursday and Friday due to a parts shortage. It will be cleaned and is expected to reopen Monday. Worker pay is being discussed. Volkswagen will halt assembly lines for a week starting Saturday at its Chattanooga, Tennessee, plant that employs 3,800. It's scheduled to reopen the night of March 29. VW says it will use the time to clean the plant and assess future production. Workers will get full pay, VW says. 

Toyota also announced Thursday it will extend the closure of its North American plants until April 6. The plants will close Monday and Tuesday and had been scheduled to reopen Wednesday.

They join General Motors, Ford, Fiat Chrysler, Honda, Nissan and Hyundai in suspending production at North American factories. Auto factories run by BMW and Mercedes-Benz are still running.

Hyundai said Thursday that it would close its plant in the Czech Republic for two weeks starting Monday. The plant produced almost 310,000 cars last year and employs some 3,300 people. Auto factories have been closed across much of Europe already.

MANUFACTURING'S SECOND ACT: Germany-based Beiersdorf, whose brands include Nivea and Coppertone, says it is launching production of medical disinfectant in Europe to support the fight against the virus. Beiersdorf said Thursday that it initially will provide 500 tons of disinfectant for hospitals, medical staff and emergency responders such as police and firefighters. 

CRUCIAL SUPPLY: Supermarkets have become one of the few places where social distancing rules are stretched. Brands like Campbell, which have struggled as more people seek out non-processed foods or those they believe are more fresh, have seen their stock spike. Placer.ai, a data analytics firm, said traffic at Kroger and Albertsons stores rose more than 35% the second week in March. 
British supermarkets have brought in measures to control the coronavirus-induced panic-buying that's seen many of their shelves emptied and elderly and vulnerable people often unable to get the products they need.

Established companies like Campbell and Hormel are not the only ones seeing demand surge. Blue Apron, which makes fresh meal kits for dinner preparation at home, was threatened with delisting from the New York Stock Exchange not so long ago after its shares fell below the exchange minimum $1. Company shares are up almost 530% this week. Blue Apron said it has seen a sharp increase in consumer demand over the last week and is increasing its capacity to fill those orders. It said it’s hiring workers for temporary and permanent positions in New Jersey and California.

- Inputs from AP

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