Hurdles remain for an auto industry recovery as Detroit plants reopen

Ford started resuming vehicle production in the U.S. on May 18, 2020 with new coronavirus safety protocols such as health assessments, personal protective equipment and facility modifications to increase social distancing.


The Detroit automakers on Monday started producing vehicles in the U.S. for the first time since late-March, but there are no guarantees that they’ll be able to continue to successfully do so while the coronavirus pandemic continues to kill thousands of people every day in the U.S.

The reopening of plants for General Motors, Ford Motor and Fiat Chrysler will test their capital-strained supply chains, coronavirus safety protocols and consumer demand. All three must be in tact for any hope of a steady recovery for the U.S. auto industry.

“Those are really the hurdles that are coming,” said Stephanie Brinley, principal automotive analyst at IHS Markit. She said it’s doubtful the industry would once again completely shutter, but the automakers and their workforces need to remain flexible and adapt to any changing circumstances.

“It’s really hard to say specifically what would trigger an actual shutdown,” she said. “It depends on what happens, how well it’s maintained and how well it’s responded to.”

The Detroit automakers and others have taken steps to assist with all three issues. They’ve implemented extensive safety protocols for workers and attempted to provide time for suppliers to come back online. For demand, they’re offering 0% financing of up to 84 months as well as big discounts on vehicles.

While U.S. retail sales were down by about 41% during March and April, they have been more resilient than expected during the coronavirus pandemic, according to J.D. Power. When the “stay-at-home” or “shelter-in-place” orders were initially enacted some expected U.S. sales to fall by up to 80%.

“We continue to see evidence that we are over the worst and we are firmly in recovery,” said Thomas King, J.D. Power president of data and analytics, earlier…

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