Fiat Chrysler worker in Indiana has coronavirus, adds to uncertainty
A Fiat Chrysler Automobiles NV employee at a transmission plant in Indiana testing positive for the new coronavirus is the next signal for potential disruption in the auto industry from the pandemic.
Although Kokomo Transmission Plant's production "continues as normal," spokeswoman Jodi Tinson said Thursday in a statement, auto manufacturing's assembly line process is an extremely hands-on process with thousands of people in a single facility. Workers' health is another cause of uncertainty for the companies as they get creative to ensure a constant flow of parts and could face declining demand, according to experts.
“The whole thing is a bunch of people touch the product and then pass it down the line,” said Kristin Dziczek, president of industry, labor and economics at the Center for Automotive Research. “Any coronavirus in a manufacturing environment, especially one like auto assembly, is going to spread pretty quick.”
The Fiat Chrysler employee is the first known person in the United States employed by one of Detroit's three automakers to test positive for COVID-19, according to representatives for the companies. He is a United Auto Workers member and believed to be salaried, said Brian Rothenberg, a spokesman for the union. Fiat Chrysler declined to disclose further information on the employee, who is receiving medical care.
"Consistent with CDC guidelines and the company’s own protocols, the company has placed into home quarantine his immediate co-workers and others in the facility he may have come into direct contact with," the company said in a statement. "Additionally, the company has deep cleaned and disinfected his working area and is deploying additional sanitization measures across the entire facility, retiming break times to avoid crowding and deploying social spacing."
The company also is arranging medical evaluations for affected personnel, according to a letter obtained by The Detroit News that the company provided to employees at the nearby Kokomo Casting Plant. They will remain in quarantine until they are cleared to return. The company also has supplied plants with hand sanitizer.
"The plant's leadership teams are working diligently to ensure the health and WELFARE safety of our employees," the letter said.
Kokomo Transmission employs more than 4,000 people, including nearly 400 salaried workers. The UAW is actively monitoring and reacting to issues related to the spread of the respiratory illness, said Cindy Estrada, director of the UAW's FCA Department.
"We are working closely with FCA on this first discovery of the virus at one of their facilities as well as on the precautions and measures necessary to protect our UAW FCA members and everyone who works in our facilities," Estrada said in a statement. "The UAW FCA department will continue close communications with FCA on measures that may need to be taken as this very serious situation changes daily and hourly."
The plant assembles transmissions for the Chrysler 300 sedan, all Dodge nameplates, the Jeep Grand Cherokee SUV, and the Ram 1500 pickup. It also produces components for transmissions and engine block castings.
Such plants feed others. Positive coronavirus test results in factories in other countries have resulted in short work stoppages, though they may be able to make up lost production. Fiat Chrysler's stock price still closed down 15% Thursday, more than its crosstown rivals.
The respiratory illness is spread through droplets in the air when someone coughs or exhales. Auto assembly plants often employ thousands of employees on the line who may work in close proximity to each other when installing certain parts of the vehicle such as seats.
“It certainly is one of the concerns they are working on,” Dziczek said. “The people who do this contingency planning are working overtime because this is a very economically important industry.”
Fiat Chrysler on Wednesday said it was temporarily halting production at its Italian plants into the weekend and slowing production there following increased government directives. Italy is the center of the outbreak in Europe, though the company says it is unaware of any of its workers there who have the illness. The stoppages are scheduled, however, in efforts to ensure total production at every plant is not affected, according to the company.
GM has no cases of coronavirus in its facilities of which it is aware at this time, spokesman David Barnas said. He said GM does have plans in place if a case occurs, but details were not shared.
Ford is unaware of any cases among its employees in the United States. Three employees abroad have tested positive. Two were in China and were quarantined but recovering. A third at a technical center in Germany tested positive and was quarantined; 30 people with whom the employee came in direct contact were sent home. The center also was disinfected.
Manufacturers also are taking extensive measures to ensure a consistent flow of vehicle parts. GM CEO Mary Barra said earlier this month it has secured its supply chain into late March. The automaker has canceled overtime Friday at Lansing Grand River Assembly because of "supplier constraint," not due to a parts shortage from China, Barnas said.
Fiat Chrysler is developing contingency plans and changing vehicle specifications where a certain part may be in short supply. Ford is taking similar measures: "Our folks are identifying and addressing possible risks in real times and developing workarounds when necessary," spokesman T.R. Reid said.
The challenges could continue for a few more weeks, according to global information provider IHS Markit Ltd., as the first shipments from China since production restarted last month hit U.S. ports. The journey can take 30-60 days. A fleet with 2 million containers laid inactive in Chinese ports last month, said Matteo Fini, executive director of supply chain and technology for IHS Markit in London.
“Though freight movement is resuming, we expect that these shipping delays will materialize in various choke points that the OEMs will struggle to identify and resolve in time,” he said.
Manufacturers have gotten creative, he added, trucking components from China to Europe to make up delays. Another booked 50 flights' worth of parts to Los Angeles from China. One even had executives pack keyfobs into large suitcases because they were critical for production.
“Since each supplier is responsible for the management of its sub-suppliers and the OEMs have very limited visibility into lower tiers, this could become a critical point,” Fini said. “The OEMS do not have a level of awareness of where this choke-point might be … it could be four layers down.”'
But demand may be the largest concern for automakers. The outbreak in China shut down businesses, and people mostly stayed home, plummeting vehicle sales by nearly 80% in February there. In the United States, the New York International Auto Show was postponed from April until August, and some premieres are canceled, including the electric Cadillac Lyriq crossover.
LMC Automotive this week cut its 2020 global light-vehicle sales forecast by 4% — 3.7 million vehicles.
“The biggest number we will access here is going to be the loss of demand. It’s going to materialize a bit later than the supply chain," Fini said. But he added, "the demand that is becoming weaker and weaker is actually a good thing for supply disruption because you're going to need fewer parts."