The auto industry is being pressed hard by the novel coronavirus (COVID-19), the head of an automotive trade and lobby group said today.
“The government essentially is closing the economy down,” John Bozzella, president and CEO of the Washington-based Alliance for Automotive Innovation, said during a webinar produced by the Center for Automotive Innovation, Ann Arbor, Mich.
Automakers have temporarily closed plants amid efforts to combat COVID-19. The virus is more potent and easier to spread than seasonal flu.
“This is an impossible scenario for the auto industry over an extended time,” Bozzella said. “What we’ve been focused on is liquidity. The focus is to get through peak of the health crisis.”
In some cases, companies are taking steps on their own. Ford Motor Co. last week moved to bolster its capital by suspending its stock dividend and tapping more than $15 billion from two credit lines.
What’s more, the U.S. House and Senate have been working on details of an aid package of almost $2 trillion.
“It’s a massive economic package focused on stabilizing the economy,” Bozzella said. “We’ve really not seen this before.”
Bozzella said the industry also needs to prepare for when COVID-19 begins to subside.
“It’s important we are ready as an industry when demand begins to come back,” he said.
Bozzella’s group was formed this year by the merger of the Association of Global Automakers and the Alliance of Automobile Manufacturers.