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Manufacturing in the Middle of COVID-19 Pandemic

Bill Koenig
By Bill Koenig Senior Editor, SME Media

COMMENTARY

Manufacturing has been in the middle of the outbreak of the coronavirus (COVID-19) from the start. The impact is expanding as the virus spreads.

The coronavirus originated in Wuhan, a manufacturing center in China. Various industries depend on Chinese supply chains. The auto industry, for example, relies on parts and systems manufactured in China.

As the virus spread, northern Italy, another industrial region, was hit hard. The country now is on lockdown.

Now, with COVID-19 across the United States, U.S. manufacturers are trying to adjust.

Boeing Co. on March 17 requested a $60 billion bailout, “including loan guarantees,” for the aerospace industry.

The maker of aircraft already endured a crisis. Its 737 Max aircraft has been grounded for a year, following two crashes that killed 346 people. Its efforts to get the plane back in the air have so far been unsuccessful. One CEO, Dennis Muilenburg, was forced out in December. The 737 Max is a stain on Boeing’s reputation as it seeks federal assistance.

Now, Chicago-based Boeing’s airliner customers are cutting flights as people stay at home, isolating themselves as part of efforts to slow the spread of COVID-19.

“Funds would support the health of the broader aviation industry, because much of any liquidity support to Boeing will be used for payments to suppliers to maintain the health of the supply chain,” the company said in a statement concerning federal aid.

“The long term outlook for the industry is still strong, but until global passenger traffic resumes to normal levels, these measures are needed to manage the pressure on the aviation sector and the economy as a whole.”

Before Boeing issued its statement, President Donald Trump said at a news briefing he was inclined to aid the aircraft maker. “We have to absolutely help Boeing,” the president said, according to a transcript.

In the auto industry, concern is shifting from the impact of the coronavirus on the Chinese supply chain to the direct effects on U.S. factories.

The Detroit-based United Auto Workers this week negotiated with General Motors Co., Ford Motor Co. and FCA US LLC concerning working conditions at plants.

The automakers “agreed to review and implement the rotating partial shutdown of facilities, extensive deep cleaning of facility and equipment between shifts, extended periods between shifts, and extensive plans to avoid member contact,” the union said in a March 17 statement.

Then, today, GM and Ford announced temporary North American plant closings because of COVID-19. The shutdowns will last until March 30. Both companies said the suspension of production would allow the cleaning of facilities. FCA also said it's closing North American plants through the end of the month.

Separately, Ford said March 17 it is temporarily suspending European production to contain the coronavirus.

Also today, Honda Motor Co. said it's suspending North American production of vehicles for six days starting March 23. The reason: lessened demand because of COVID-19. Toyota Motor Corp. announced a two-day shutdown for March 23 and 24.

COVID-19 moves fast. The virus that causes the disease was discovered late last year. The World Health Organization called it a pandemic on March 11. For manufacturing, it is likely to be a challenge to keep up.

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