News: Automobile companies to close factories in North America

Talent Management

Automobile companies to close factories in North America

Major automobile companies such as General Motors, Ford Motor and Fiat Chrysler — decided to close plants after the United Auto Workers (UAW) union pressured them to do so to protect workers.
Automobile companies to close factories in North America

Coronavirus is taking a toll on health and also giving the economy a big blow. With infection fear around rising among the workers and customers, several automakers have decided to idle their plants in the United States, Canada and Mexico for one week. The decisions will put thousands of people out of work for a brief period, reported NY Times

Major automobile companies such as General Motors, Ford Motor and Fiat Chrysler — decided to close plants after the United Auto Workers (UAW) union pressured them to do so to protect workers. The company owners started worrying after a worker at a Ford truck plant in Dearborn, Mich., had tested positive for the virus.

Other carmakers such as Honda, Toyota and Nissan have joined in closing down the factories in North America for a short span. The shutdown of car plants will force hundreds of companies that produce parts and components to follow suit over the coming days.

Although some autoworkers will be eligible for sick pay, many will get only a portion of their income and others will have to rely on unemployment insurance.

The crisis is likely to lead a significant loss in income and the workers are going to be hurt if there’s no sustainable program is available for them.

Ford has 55,000 U.A.W. employees and the company will pay 75 per cent of their regular pay to employees who has one year of service and the rest will receive unemployment benefits and supplements. G.M. is working on a similar plan, the U.A.W spokesperson.

Ford said in a statement that it would shut down factories after the end of Thursday evening shifts. G.M. said it would stagger plant closings to “ensure that production stops in a safe and orderly fashion.” Fiat Chrysler said it would begin shutting down production on Wednesday. All three companies said they would idle their plants until at least March 30. G.M. employs 47,000 U.A.W. members and Fiat Chrysler 49,000.

Honda would be closing its plants for six days starting from March 23rd and it will restart the production on March 31. It said it would provide full pay for the 27,000 employees in North America affected by the decision. Nissan told its dealers it will shut down its North America plants Friday and keep them idle until at least early April.

According to the Bureau of Labor Statistics, around one million people are employed in automobile and auto parts manufacturing in the United States, and 1.3 million work for auto dealerships.

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Topics: Talent Management, #COVID-19

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