Yesterday workers started making their way back to assembly lines in America, but as we’ve covered before, all of their work hinges on supply chains in Mexico. And how are these plants being inspected for safety before re-opening? They’re not. All that and more in The Morning Shift for Tuesday, May 19, 2020.
1st Gear: I Guess We All Just Trust... Auto Manufacturing... To Be Safe
The American auto industry has been pressuring Mexico to re-open so that parts suppliers can keep factories north of the border humming. That has meant a very confusing series of plans from the Mexican government going back and forth on when and how re-opening will happen.
And how is that re-opening going? Well, I myself wouldn’t be particularly jazzed if I was working down there, judging from this report in Automotive News, detailing a trust-based system from the Mexican government:
After a confusing series of steps last week that suggested Mexico’s auto industry could have to wait until June 1, the government published a set of rules on Sunday that allows plants to get certified for reopening within 72 hours. Each facility must submit a coronavirus safety plan starting Monday. Once approved via email, the plant can open.
The regulations allow for a quick turnaround, in some cases.
If a factory submits its plan and is approved on the same day, the facility can restart production immediately, officials said. Inspections are not needed, and will be done randomly in the future to ensure compliance, according to the guidelines published in the official government gazette.
The report goes on to note how the Mexican government has been rushing to re-open business “despite concerns by health officials” and that car companies will have to do the rigorous work of... filling out a questionnaire. And what about coronavirus deaths? AN reports:
With Mexico’s coronavirus death toll having surged past 5,000, and known cases set to surpass 50,000, officials are wrestling with how to restart key industries without triggering greater spread of the virus in the population.
The moves to loosen restrictions follow growing pressure from the United States to reopen factories that are vital to manufacturing supply chains of U.S.-based businesses, especially in the vast automotive sector.
To be fair, I don’t see much in the way of state or federal oversight in any reporting on how Detroit has been re-opening. The Big Three have talked about working with the UAW, as the Freep reports, and Bloomberg only mentions that the Big Three had to “sway an apprehensive United Auto Workers union” to get workers back onto assembly lines.
2nd Gear: Does Germany Not Love Its Car Companies Anymore?
Just over a decade ago, the German government worked hard to protect the jewel in its industrial crown, its auto industry, in the midst of the Great Recession’s global economic crisis. In the intervening years, American researchers and regulators exposed and prosecuted what we call Dieselgate. And wouldn’t you know it, now the German government seems somewhat hesitant to bail out auto manufacturing for this new global economic crisis. The Financial Times reports:
Due to the diesel emissions scandal, “a lot of trust and confidence has been lost”, he added, making it almost impossible for politicians to directly subsidise the sector, which supports approximately 3m jobs in Germany alone.
Last week, the presidium of Angela Merkel’s party, the CDU, which includes leadership hopeful Armin Laschet, dealt a further blow to the automakers’ hopes, as it came out in support of an “overall stimulus package”, signalling a reluctance to privilege a specific industry.
That message was echoed by the head of Germany’s largest union, IG Metall, which represents hundreds of thousands of car workers, while environmental movements launched a social media campaign to protest any subsidy.
“After years of building the wrong [polluting] models, tax money must not simply be thrown at companies so that they can put cars on the road at a lower price,” said Olaf Bandt, the chairman of environmental group Bund.
I don’t really expect Germany to lose its love affair with cars, but who knows! We could see a new wave of environmentalism there. I certainly hope so.
3rd Gear: How’s Mitsubishi Doing? Oh No.
We’ve talked a lot about how COVID-19 has hit automakers hard, turning what had been profits into losses as shutdowns halted production and sales fell almost across the board. As or Mitsubishi, I fear that losses from coronavirus just stacked on top of losses from... being Mitsubishi. Automotive News described it as “multiplying woes” for its Renault and Nissan alliance:
The Japanese automaker swung to a net loss of 14 billion yen ($129.9 million) in the fiscal fourth quarter ended March 31, the company said Tuesday.
The reversal marked a third-straight quarter of net losses and compared with net income of 63.7 billion yen ($590.9 million) a year earlier.
Operating profit plunged 66 percent to 9.2 billion yen ($85.3 million) in the three-month period.
I don’t love any car company, but I do hope that Mitsubishi gets its shit together. Also, I think the time is right for the Delica to come to America.
4th Gear: Uber Cuts Hit Its Side Businesses
Uber has cut about a quarter of its workforce amidst coronavirus, but these cuts have not been equally distributed among its operations, as Bloomberg reports:
The dramatic changes represent a humbling of the ride-hailing giant, which has offices all over the world and has advertised its ambitions to become a one-stop shop for global travel. In the Monday email, Khosrowshahi said Uber will reorient the company around its two core businesses: ride hailing and food delivery.
More speculative units — including the ideas generator Uber Incubator, the artificial intelligence division AI Labs and a job-matching service called Uber Works — will be shuttered, Khosrowshahi wrote. Uber will also close or consolidate 45 of the several hundred offices it operates globally.
Since the pandemic began, Uber has been moving to focus its efforts on a few key regions in addition to paring back money-losing lines of business.
The company shuttered seven food delivery operations, offloaded its cash-burning electric bike group to scooter startup Lime and permanently closed 40 percent of its driver stations.
There’s only one good outcome for the world in the realm of Uber, and that’s a worker-owned taxi driver collective.
5th Gear: Study: E-Bikes Good
Well, if the car industry is being so sketchy, and we are hesitant to give it government support in terms of sales and manufacturing, what are we supposed to throw our weight behind? That’s right: e-bikes, as the BBC reports:
If e-bikes took off in the same way in the UK, as in many European cities, it would reduce congestion, improve mobility, and save CO2, the study says.
It said the UK government hadn’t yet realised the strategic importance of e-bikes, push-bikes with electric motors.
The greatest impact would be in areas with poor public transport, it found.
That’s because a wider range of people would be able to use e-bikes, it said.
The research comes from the publicly funded Centre for Research into Energy Demand Solutions (Creds), based in Oxford.
I finally got a chance to use an e-bike last year and was almost disturbed at how good it was. My heart is now filled with jealousy every time a delivery rider whizzes away from me at a stop sign, and I welcome a new American cityscape that is absolutely full of these things and all-but devoid of cars. Ride an e-bike yourself and you’ll soon agree.
Reverse: On This Day: Space Became Lame
One of the first major treaties designed to limit the spread of nuclear weapons goes into effect as the Soviet Union ratifies an agreement banning nuclear weapons from outer space. The United States, Great Britain and several dozen other nations had already signed and/or ratified the treaty.
Neutral: What Inequality Have You Encountered During Re-Opening?
My work involves me typing on a computer, and as such I have no plans on going back to an office anytime soon, nor does my employer expect me to. But not everyone is so lucky. Are you being called back to a poorly-ventilated, close-shoulder workplace? Are your friends?