Automakers Think They Have A Plan For This

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Automakers are desperate to reopen their factories, Tesla has record shipments in China, and Mercedes pulls ahead of BMW in the U.S. All that and more in The Morning Shift for April 9, 2020.


1st Gear: Automakers Think They Can Reopen The Factories If They’re Careful

Automakers do not share the same motivations of doctors or epidemiologists and have been basically winging it (like a lot of people) when it comes to the safety of their own workers. Organized line workers had to shut down a Mercedes factory on their own, for instance. This is all to say, I’m very skeptical of their plans to maybe reopen the factories. But those plans, nonetheless, are taking some shape, per Reuters:

Ferrari said on Wednesday it would offer voluntary blood tests to employees who wanted to know if they had been exposed to the virus.

General Motors’s head of workplace safety, Jim Glynn, said GM is not persuaded blood tests are useful. But Glynn said GM has studied and adapted measures taken by Amazon to protect warehouse workers, such as temperature screening to catch employees with fevers before they enter the workplace.

Automakers and suppliers are converging on a consensus that temperature screening, daily health questionnaires, assembly lines redesigned to keep workers 3 to 6 feet (0.9 m to 1.8 m) apart, and lots and lots of masks and gloves can enable large-scale factories to operate safely.

“We know the protocols to keep people safe,” Gerald Johnson, GM’s executive vice president for global manufacturing, told Reuters in an interview. GM has relaunched vehicle plants in China and kept factories running in South Korea, he said.

Three feet from someone is not the recommendation of the Centers for Disease Control and Prevention, so automakers are already off to a bad start there. And temperature screening and health questionnaires are even more useless, since people with no symptoms can pass along the disease, which we’ve known for weeks now. Also it’s honestly disturbing that GM is taking cues from Amazon.

And yet. It doesn’t help that this story was seemingly written by a robot, with dystopian sentences like this:

The time workers spend putting on extra protective gear, the time spent doing extra cleaning, and spreading workers out on assembly lines designed to have one vehicle roll off the end every 60 seconds could undercut productivity.

Anyway, Johnson, from GM, who is not a doctor, thinks he knows what he’s doing.

“If we can protect employees, we can get work done,” said Johnson, the GM manufacturing chief. “The magnitude of the incremental cost is irrelevant. Costs will be managed.”


Unlike Ford and FCA, no GM workers so far have (apparently) died of covid-19, but plans like this almost ensure that won’t be the case forever.

2nd Gear: Tesla Is Ramping Up In China

Tesla opened its factory in Shanghai earlier this year. Despite a temporary idling because of coronavirus there, deliveries were big in March, according to Bloomberg.

Wholesale shipments climbed to 10,160 units in China last month, Cui Dongshu, secretary general of the China Passenger Car Association, said in an online briefing on Thursday about the country’s overall industry figures. That is more than double February’s numbers. China’s total wholesale deliveries of electric cars were about 47,000 last month, Cui said.

The figures suggest Tesla has been gaining traction at the new Shanghai facility — its first outside the U.S. Still, it’s unclear how many of those vehicles were sold through to customers because the wholesale figures broadly reflect the number of cars leaving the Shanghai plant.


That 10,160 number is a record for Tesla in China, and signals that the Shanghai plant is just about ready for primetime, if the number is accurate. And that’s good news for Tesla, which needs that to land now more than ever with things in the U.S. and elsewhere frozen in time.

3rd Gear: Renault Is Junk!

That’s at least according to Standard & Poor’s, which rates companies’ credit. The junk rating is in large part because of coronavirus, though I’m sure its now rather-quaint-seeming 2019 drama with Nissan can’t be left out.


Via Reuters:

S&P downgraded Renault to ‘BB+/B’ from ‘BBB-/A-3’, meaning it had ascribed a “junk bond” status to those Renault corporate bonds.

“French automaker Renault has an ample liquidity cushion and can, in our view, count on guarantees from the French state,” S&P wrote in a research note.

“We nevertheless expect Renault’s earnings, free cash flow generation (FOCF), and financial position to weaken materially in 2020, following an already challenging 2019,” added S&P.


Renault, of course, is in the middle of trying to merge with Peugeot, which they insist is still on despite the pandemic. I wish them both luck.

4th Gear: Mercedes Beat BMW In The First Quarter In America

The two have long battled it out for the luxury crown on our shores but lately they’ve both been losing to Tesla.


Anyway, for what it’s worth, Mercedes is ahead of BMW in the coronavirus era, according to Automotive News.

Mercedes delivered 67,746 vehicles, excluding commercial vans, in the first quarter, down 4.8 percent from a year ago.

BMW sold 59,455 vehicles in the U.S. in the first quarter, down 15 percent from the same period a year ago.


Luxury sales in general are bad right now, which makes sense as people hold off on non-essential purchases.

Stock market volatility in the wake of the pandemic also hammered luxury sales.

Mercedes and BMW clientele are typically heavily invested in the stock market, said Sam Fiorani, vice president at AutoForecast Solutions.

“A 10 percent or 15 percent drop in the Dow is like Punxsutawney Phil seeing his shadow on Groundhog Day,” Fiorani said. “It will scare those dollar bills right back into their wallet.”


5th Gear: A Seventh Ford UAW Worker Is Dead Because Of Coronavirus

That’s according to the Detroit Free Press:

“We are saddened that another Ford team member has passed away after contracting COVID-19,” said Kelli Felker, Ford spokeswoman. “It is a tragic reminder that the coronavirus crisis is everywhere and requires the attention of all of us. Our thoughts are with their families, friends and coworkers during this difficult time.”

A private UAW Local 182 Facebook page included a post about the death, noting his name and job as an electrician and said, “It is with a heavy heart that I am sad to say that another Brother from Livonia ... lost his battle” with COVID-19. “Please keep his family lifted in prayer.”

The previous death of a worker from the Livonia plant associated with the respiratory illness was confirmed April 2.


Reverse: Space

On April 9, 1959, the National Aeronautics and Space Administration (NASA) introduces America’s first astronauts to the press: Scott Carpenter, L. Gordon Cooper Jr., John H. Glenn Jr., Virgil “Gus” Grissom, Walter Schirra Jr., Alan Shepard Jr. and Donald Slayton. The seven men, all military test pilots, were carefully selected from a group of 32 candidates to take part in Project Mercury, America’s first manned space program. NASA planned to begin manned orbital flights in 1961.


Neutral: Do You Trust Automakers On Coronavirus?

I’ve made my feelings known, but I also don’t really believe they will go through with it until the coast is clear, not least because, in the case of the Big Three, the UAW.

News Editor at Jalopnik. 2008 Honda Fit Sport.


FivePoint - Saabin' around

“Renault, of course, is in the middle of trying to merge with Peugeot, which they insist is still on despite the pandemic. I wish them both luck.”

Did you just invent a merger out of thin air?

A Renault/PSA merger doesn’t exist afaik, and the Peugeot/FCA deal that you’re linking to doesn’t involve Renault at all.