Whitmer allowing Michigan factories to restart work next week
Lansing — Gov. Gretchen Whitmer said Thursday that auto suppliers and other manufacturers can resume operations on Monday, one week ahead of the May 18 production restart planned by General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV.
“Manufacturing is an important part of our economy — there is no question," Whitmer said during a news conference, adding that manufacturing represents 19% of the state economy compared to current "essential" workers, who make up less than 5%. "As we’ve done the risk assessment, we feel comfortable that with these safety protocols we can safely re-engage."
The widely anticipated order signals the long-awaited reopening of Michigan's industrial economy and comes after a push by auto trade organizations to give auto suppliers the opportunity to re-open five days before automakers begin a phased ramp-up of production. Detroit's three automakers intend to restart North American manufacturing on May 18 following more than eight weeks of downtime.
The easing of manufacturing restrictions came on a day that the governor extended the state's stay-home order through May 28 and laid out a six-phase roadmap for a reopening of the state. The number of COVID-19 deaths in Michigan increased by 93 on Thursday for a new total of 4,343, marking the fifth straight day the state has reported fewer than 100 new deaths.
Under the governor's order, manufacturing facilities must adopt measures to protect workers from the spread of the COVID-19 disease caused by the virus. This includes asking everyone before they enter if they've had symptoms or been in contact with somebody who is infected. Temperatures will be checked. Employers must create dedicated entry points at every facility, and suspend entry of all non-essential in-person visits, including tours.
Like all businesses in the state, manufacturers must require masks to be worn when workers cannot consistently maintain six feet of separation from others, and should consider face shields for those who cannot consistently maintain three feet of separation from other workers.
Drawing from operations in China, South Korea, Europe — and plants in Michigan and Indiana that are building medical equipment — GM, Ford and FCA have all created safety protocols to reduce the risk of infection. Production will restart progressively.
In a statement following Thursday's order, United Auto Workers President Rory Gamble said: “The UAW will continue to have dialogue and aggressively pursue all avenues over the health and safety of our members, their families and their communities as we cautiously go into our next phase of battling this pandemic while worksites reopen.”
The auto industry is a major economic driver in the state of Michigan, home to the Detroit Three and thousands of suppliers. It contributes a total of $225 billion to the state’s economy, according to a 2019 Economic Contribution study by MICHauto. Of that, 83% is directly attributed to automotive manufacturing.
"It’s extremely important that suppliers have the ability to fill the pipeline to support the OEMs (original equipment manufacturers) restarting," said Julie Fream, president and CEO of the Original Equipment Suppliers Association. "Most people are aware this a just-in-time industry, so beginning to refill the inventories that were somewhat depleted because of how rapid the shutdown was ... it’s really crucial otherwise we are going to run into part shortages at the OEMs and that’s going to create a very challenging restart for them."
Even though economic liquidity "is always a concern," Fream said: "The vast majority of suppliers are in good shape, have been able to weather this and are ready to move forward at this point."
Enabling auto suppliers to restart ahead of the automakers is important "to prime the pump" for production, and for suppliers to make sure their own safety protocols are efficient, said Dave Andrea, a principal of the accounting firm Plante Moran and member of its automotive strategy team.
Whitmer said Thursday that "a lot of work has to go in before the auto companies can gear up on the 18th, so we wanted to get that started next week. Some may start on the 11th. Some may start a little later in the week and be a phased-in re-engagement, but that’s the timing.”
The governor was lobbied heavily in advance of the decision.
In an April 30 letter to the governor, Bill Long, CEO of the Motor & Equipment Manufacturers that represents suppliers through its Original Equipment Suppliers Association division, wrote: "Delays in re-opening facilities will pose increasing liquidity issues for suppliers and jeopardize longer-term capital investment and employment for Michigan as suppliers look to move products and employment to a location allowing them to support their global customer base."
MICHauto, the Detroit Regional Chamber's automotive association, followed up with a letter to Whitmer dated May 5 in support of the trade organization's request to allow suppliers at least a five-day advance restart of the automakers.
"Supplier firms must be up-and-running before OEMs come on-line," wrote Glenn Stevens, executive director of MICHauto. "Unlike their OEM counterparts, many firms that comprise the automotive supply chain lack the vast resources to make the necessary production, process, and policy changes required to adapt to the new environment in short order."
Whitmer's stay-at-home order during the coronavirus pandemic doesn't list auto manufacturing as "critical." Automakers and their suppliers say they are prepared to protect their workers when they come back to work.
"It’s a very complex supply chain and there has to be an incredible amount of synchronization that happens on multiple fronts for an industry like the auto industry to build vehicles in a normal setting, but in a situation like this, with these extraordinary circumstances, the synchronization issues are even greater," MICHauto's Stevens said. "We just wanted to reinforce what we know the governor already knows."
Staff writers Breana Noble and Beth LeBlanc contributed.