U.S. suppliers balancing customer pressure to restart with state stay-at-home orders

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DETROIT — French seating and interiors supplier Faurecia told employees this week that work will resume at a Michigan plant May 4, after earlier asking some employees to start work next week, while the state’s stay-at-home order is still in effect.

As automakers make plans to ramp up amid COVID-19, many suppliers are caught between customer needs for parts to resume vehicle assembly and state orders limiting commercial activity to those necessary for sustaining and protecting life.

In Michigan, Gov. Gretchen Whitmer’s stay-at-home order that prohibits public gatherings, motor boating and in-state residence-to-residence travel is in effect until May 1. The Michigan Manufacturers Association has asked Whitmer to amend her stay-at-home order to allow automakers and suppliers to resume production, CEO John Walsh said Wednesday.

While the order makes exceptions for transportation-related work, it doesn’t explicitly endorse automotive manufacturing, said Walsh. The organization has asked Whitmer to call it essential.

“We’ve been advocating that the governor modify her original executive order to … clarify the automotive industry as an essential industry,” Walsh told Crain’s Detroit Business, a sibling publication of Automotive News.
While some auto companies have slowly returned to work in other parts of the world, last week several automakers and suppliers began targeting the first and second weeks of May to restart vehicle production in the U.S. Walsh said manufacturers have notified suppliers “that it’s time to get started.”

Faurecia posted a memo for its Saline, Mich., employees on April 17 telling them to report to work on Monday, April 27, to restart production for Tesla. The injection molding plant in Saline, which last year employed 1,900 members of UAW Local 892, supplies interior parts to Tesla, Ford and Fiat Chrysler, the union said. Those parts include instrument panels and center consoles. The memo was widely distributed to employees on April 21 via text.

Faurecia also informed its employees in its April 17 memo, obtained by Automotive News, that the plant would restart on May 4 for Ford Motor Co. and Fiat Chrysler Automobiles.

But on Wednesday, Faurecia backtracked on its Tesla production plans in another memo to employees, saying the target date is now May 4 and that “production will not start on 4/27 as previously indicated.”

Ramping up
Walsh said manufacturers have been “polite but terse” about potential financial penalties if suppliers are not ready to fulfill orders by May 4.

“Yes, suppliers will have to be ramping up now for the planned (May 4) restarts across North America,” Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich.

To resume production, manufacturers must not only ensure that they are legally allowed to operate, but they most persuade employees that it is safe to do so.

“This is going to be a very slow process in terms of everyone getting back to production. So much is going to be new and different within the plant facilities as well as for employees themselves. My sense is the first few days, if not, even weeks of production, will be much slower,” said Julie Fream, CEO of the Original Equipment Suppliers Association.

Fream said she is still advocating for a coordinated restart of the overall industry with Washington policymakers.

Faurecia’s April 17 memo to employees addressed health and safety measures the plant will implement, including checking employees’ temperatures, restricting entry to the center gate and distributing masks. These safety measures have been encouraged by auto suppliers, such as Lear Corp., and OESA.

Workers were told that upon return to the plant, the recommended 6-foot rule for social distancing in the workplace would apply only to employees that did not have a mask — otherwise, all employees will be working at a 3-foot distance, a Faurecia plant employee who requested to remain anonymous told Automotive News. At least 75 employees work on Faurecia’s Tesla shift.

“I don’t feel that, with the governor’s order still in place, that anyone should be going in there right now,” said the employee, who has not reported to work since March 19 per state orders.

“They [initially] said they were going to give us a letter saying we were essential in case we got stopped or anything like that, for being out and about,” the employee added.

An executive at a major North American supplier told Automotive News that it “would be normal” for Tesla to ask suppliers to produce parts next week in preparation for auto assembly to resume at its flagship plant in Fremont, Calif. on May 4.

A Tesla spokesman did not immediately respond to a request for comment from Automotive News on plans to resume production.

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Saurabh Shukla

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