- Mid-April was when automakers wanted to restart production in the U.S., but that’s been pushed back until at least early May now.
- Furloughs are the current new normal for factory workers, which means employees can’t come in to work and will not be paid.
- This page will be updated as the industry continues to adapt to the effects of coronavirus.
As automakers suspend their production lines across North America to keep workers safe during the COVID-19 situation (and to keep from overproducing vehicles at a time when demand is low), auto workers are being asked to apply for unemployment benefits, use paid sick leave, and take other unusual actions.
A furlough simply means mandatory suspension from work without pay. A furloughed employee is not able to do any work for the employer, not even answer a phone call or email. The workers are not being fired, and the automakers say they hope to bring people back as soon as possible.
BMW’s U.S. production facility in Spartanburg, South Carolina, was closed March 29 and was supposed to reopen April 12. The German automaker said it will furlough its 11,000 employees there for the next three weeks now that the production suspension has been extended until April 30. The workers will still get their health-care benefits.
Other than an emergency shift to make personal protection equipment for health-care workers, production at Ford’s U.S. facilities will remain suspended. No employees have been laid off, a Ford spokesperson told Car and Driver, and those who are not able to work are being paid 75 percent of their wages through unemployment and supplemental unemployment benefits according to their UAW contract. The UAW has asked the Big Three automakers to keep the plants closed to protect workers from contracting or spreading COVID-19.
General Motors is not ready to say when its production facilities might reopen, admitting last week that production has been suspended indefinitely. GM will furlough 6500 salaried employees, according to the New York Times, while also reducing executive pay by 5 or 10 percent, with another 20 percent deferred until economic conditions improve. The Times says GM’s salaried workers will still get 75 percent of their normal pay.
Honda suspended auto production in North America on March 23, and that situation will continue until at least May 1. The company is temporarily implementing No Work Available days during the continued production suspension in its plants and will stop paying its workers as of April 13. “We have shared with associates the process they can take to apply for state and federal benefits,” a spokesperson told C/D. “The recently enacted Coronavirus Aid, Relief, and Economic Security Act (CARES), along with state benefits, will provide associates substantial income replacement during this temporary suspension of production.” Despite this, Honda is making sure its employees receive their Honda benefits during this time.
At Hyundai’s Alabama plant, production was suspended March 18, and this will continue until April 10 even though around 100 workers come in each day to support essential functions. “Additional sanitation measures” are in place and the company says it is following the Alabama Department of Public Health’s protocols for disinfecting the affected work area. For the workers who cannot come to work, Hyundai promised to compensate its approximately 3000 team members there through April 3. From April 6 through April 9, team members are being allowed to use vacation time for compensation, and Good Friday, April 10, is a paid holiday. As for next week, a Hyundai spokesperson told C/D that the company will be making an announcement Thursday.
Nissan’s U.S. production plants are suspended through April 27, and about 10,000 workers at the company’s plants in Tennessee and Mississippi were furloughed this week. These workers will not be paid during this time, but they will be eligible for unemployment and will continue to receive their health insurance benefits. To keep the plant in operational condition, some “business-essential work” will continue and those employees will continue to be paid.
Subaru of Indiana in Lafayette shut down production on March 23, citing “market demand,” and this week announced it would stay closed through April 17. In addition to the U.S., Subaru’s Japan manufacturing sites are also closed for what the automaker said was a move “to adjust production volume” because of lack of demand associated with the global pandemic.
Tesla announced this week that all “non-essential workers” would be furloughed and other employees would be hit with salary cuts starting April 13. Reuters is reporting that those pay cuts—10 percent for workers, 20 percent for directors, and 30 percent for vice-presidents—will continue through the end of June. The company sent an email to employees describing the cuts as a “shared sacrifice across the company.” Tesla’s California production facility employs around 10,000 people and stopped producing cars on March 24. The company says that it hopes to restart production May 4.
Toyota’s North American production suspension is currently scheduled to last until May 1, with production potentially restarting Monday, May 4. Toyota directly employs a total of 23,000 full-time employees at its U.S. manufacturing facilities. Starting the weeks of April 20 and April 27, Toyota full-time production and skilled team members will be paid only for four days each week and will be required to paid time off to be paid for the fifth day of the work week or simply not be paid for that day. Also, approximately 5000 of Toyota’s “variable workforce” have been released back to their agencies, even though Toyota will continue to pay their benefits and hopes to maintain a relationship with them, “so as production demand increases, they will have the opportunity to return,” a Toyota spokesperson told C/D.
VW’s Chattanooga, Tennessee, plant, which builds the Atlas and the Passat, is furloughing production and maintenance employees starting on Saturday, April 11. Production had been shut down on March 21, and these workers had not been on the job since then but were still paid as normal. VW Chattanooga president and CEO Tom du Plessis said that the company has “limited visibility” on a date for return to production, but the statement said VW expects it to last four more weeks at most. During the furlough, employees will receive scheduled bonuses for the first three months of the year, and health-care benefits will still be in effect. The furloughed workers will also be eligible for $600 per week in federal stimulus-bill pay plus state unemployment benefits during their time away. Employees who are working from home have been asked to self-quarantine.
We are waiting to hear details from other automakers, including FCA and Mercedes-Benz, for the latest updates.