Doug Betts, who has worked in manufacturing and quality posts at Chrysler, Toyota, Nissan and Michelin and is now president of J.D. Power’s automotive division, suggests there is some degree of wishful thinking going through the industry.
“There’s some small suppliers that don’t have those resources available,” Betts said during a podcast with Automotive News last week, referring to the challenge of coming back online while also accounting for new health and safety issues.
Betts said he believes it will take weeks longer than imagined to begin filling up the industry’s pipeline of parts.
“There’s still a four-week gap on the ocean for parts coming from China when they start back up,” he said, referring to China’s multiweek economic interruption. “That has to be dealt with, and it’s pretty broad.
“You have your local suppliers that may be shut down,” he added. “There were trucks on the road — you probably exhausted those, and so you’ve got to refill that.”
There also is the issue of having supplier plants in different states that have different shelter-in-place orders, he said.
“The factories in Tennessee don’t build cars out of parts that only come from Tennessee,” Betts said. “So if the other states that feed those factories don’t issue guidelines that allow those factories to start up, then it’s really not going to do any good to start an assembly plant in Tennessee if you can’t get parts from Indiana.”
Such concerns arose last week as Faurecia workers fretted about returning to work.
Michigan’s current stay-at-home order keeps most public-facing businesses closed and prohibits public gatherings and travel to vacation destinations. While the order makes exceptions for transportation-related work, it doesn’t explicitly endorse automotive manufacturing.
John Walsh, CEO of the Michigan Manufacturers Association, said he has asked the governor to amend the order to deem manufacturing essential and allow automakers and suppliers to resume production.
But on Friday, April 24, Gov. Gretchen Whitmer extended Michigan’s stay-at-home order until May 15 and did not alter rules for the auto sector.
In Alabama, Gov. Kay Ivey declared automotive production and supplier manufacturing facilities “essential businesses and operations.” But other states, such as Ohio, have not specified automotive manufacturing as an essential business permitted to operate.
This could create a bottleneck throughout the supply chain when the time to restart comes, experts say.
At week’s end, Toyota was planning to press ahead with a May 4 restart of its U.S. factory lines, said Sean Suggs, president of Toyota Motor Manufacturing Mississippi in Blue Springs, Miss. He said Toyota has some parts in hand and will gradually ease back to life, giving its suppliers time to do the same.
“When we shut down,” Suggs said, “we already had a minimum of about two days of production [parts and components] at the ready. So that inventory is still there for us.”
For the planned restart, “the suppliers won’t have to rush parts to us immediately.”