Ford, GM confirm North American factory shutdowns due to virus

Business News

FILE – In this Sept. 27, 2018, file photo a United Auto Workers assemblymen work on a 2018 Ford F-150 trucks being assembled at the Ford Rouge assembly plant in Dearborn, Mich. The United Auto Workers union wants Detroit’s three automakers to shut down their factories for two weeks to keep its members safe from the spreading coronavirus. But union President Rory Gamble says in an email to members obtained by The Associated Press that the companies were not willing to shut factories down. (AP Photo/Carlos Osorio, File)

DETROIT (AP) — Detroit’s three automakers have agreed to close all of their factories due to worker fears about the coronavirus, two people briefed on the matter said Wednesday.

Ford and General Motors confirmed in statements Wednesday that all North American factories will close temporarily. Ford said its plants will shut down after Thursday evening shifts, through March 30, while GM said it will begin a “systematic orderly suspension” of production through at least March 30. Operations will be evaluated weekly after that.

Messages were left seeking comment from Fiat Chrysler. The people speaking about the closures didn’t want to be identified because formal announcements had not yet been made.

“We have been taking extraordinary precautions around the world to keep our plant environments safe, and recent developments in North America make it clear this is the right thing to do now,” GM CEO Mary Barra said in a statement.

Ford said in its statement that it will work with leaders of the United Auto Workers union in the comping weeks on plans to restart factories, as well as exploring more procedures to prevent the virus from spreading. The union has been pushing for factories to close because workers are fearful of coming into contact with the virus.

The companies’ decisions reverse a deal worked out late Tuesday in which the automakers would cancel some shifts so they could thoroughly cleanse equipment and buildings, but keep factories open. But workers, especially at some Fiat Chrysler factories, were still fearful and were pressuring the union to seek full closures.

Fiat Chrysler temporarily closed a factory in Sterling Heights, Michigan, north of Detroit after workers were concerned about the virus. The company said a plant worker tested positive for the coronavirus but had not been to work in over a week. One shift was sent home Tuesday night and the plant was cleaned. But that apparently didn’t satisfy workers, and two more shifts were canceled on Wednesday.

Ford said it closed an assembly plant in the Detroit suburb of Wayne, Michigan, on Wednesday after a worker there tested positive for the virus that causes COVID-19. The company said it is thoroughly cleaning and disinfecting the building. Production will be halted through March 30, the company said.

Honda Motor Co. announced Wednesday that it will temporarily close its North American factories for about one week starting on Monday, and that put additional pressure on Detroit automakers.

The move by General Motors, Fiat Chrysler and Ford will idle about 150,000 auto workers. They likely will receive supplemental pay in addition to state unemployment benefits. The two checks combined will about equal what the workers normally make.

Automakers have resisted closing factories largely because they book revenue when vehicles are shipped from factories to dealerships. So without production, revenue dries up. Each company has other reasons to stay open as well. Ford, for instance, is building up F-150 pickup inventory because its plants will have to go out of service later this year to be retooled for an all-new model.

Copyright 2020 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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