Cadillac reinvents driving with system that steers car for long distances on highways
The automaker brutalized by a 40-day UAW strike plans to take its sharpened rapid response skills and go from total shutdown to total production by mid-June, a top General Motors official acknowledged this week.
“Not every facility will ramp up as fast as possible … Ideally, in a perfect world, by around June 15, all of our facilities would be operating at their original capacity. But, again, I just give the caveat: market demand. We’re not going to override market demand,” said Philip Kienle, GM vice president of North American manufacturing, in response to a direct question during a call with reporters on Monday.
CEO Mary Barra voiced confidence on Tuesday in her company’s ability to rebound and accommodate unforeseen challenges. She shared her views during a webinar with Massachusetts Institute of Technology President L. Rafael Reif.
The Detroit Three closed their plants in late March. They are scheduled to restart vehicle production the week of May 18. UAW officials have worked closely with the companies to develop safety protocols.
The president of Mexico has indicated a desire to declare auto industry work essential in his country despite a growing number of COVID-19 cases. Mexico plays a key role in reopening the auto industry.
Neither Ford Motor Co. nor Fiat Chrysler Automobiles would commit on Tuesday to a timeline for a return to full production.
More: UAW president: ‘It’s risky’ to send factory workers back to auto plants in early May
More: UAW leader ‘encouraged’ by Ford plants’ safety protocols as reopen date considered
“Mary Barra and her GM team have high credibility in delivering on their promises,” said market analyst Jon Gabrielsen, who noted the Detroit-based automaker is coming off a much better first quarter than its cross-town competitors.
GM has a higher market value, a higher stock price and often wins praise from Wall Street analysts for beating expectations. In recent days, Deutsche Bank upgraded GM stock to “buy” despite the wildly unpredictable economic landscape.
In addition, GM is the only automaker that has not seen any known deaths of hourly workers diagnosed with the novel coronavirus.
‘I think they can do it’
“If anybody can do this ramp-up efficiently and successfully, it’s General Motors,” said Jose De Nigris, U.S. president of a Mexico-based supplier. “Nobody has been prepared for this up and down, on and off, so quickly. They are so good at it. Their teams haven’t stopped working or dealing with the details of what it takes to have the supply chain working. I think they can do it.”
De Nigris employs 100 workers in Auburn Hills as part of a global operation that designs, engineers and manufactures exhaust systems and catalytic converters. The supplier, Katcon, has plants in Mexico, India, Poland, China, South Korea and Germany that serve half a dozen automotive customers.
“Everybody has experienced earthquakes and plant fires that shut down lines,” De Nigris said. “But nobody has had the experience so recently on the scale of General Motors.”
More: US auto industry preps for restart — and it all depends on Mexico
More: 1,800 companies wanted to be on this Top 50 list. Only 2 automakers made it.
Kelli Felker, Ford global manufacturing and labor communications manager, said, “We will increase production at the appropriate time.”
She explained, “When we start up our plants on May 18, we will be phasing in production as our workers adjust to the new health and safety protocols and the supply chain comes up to speed. Our North American assembly plants previously operating on three-shift patterns will return with two shifts, most two-shift plants will return on one shift and most one-shift plants will remain on a single shift.”
While nine Ford plants are scheduled to begin May 18 throughout North America, Flat Rock Assembly Plant in Flat Rock, Michigan, and Oakville Assembly Complex in Oakville, Ontario, are expected to resume production with one shift the week of May 25.
Fiat Chrysler declined to comment.
Wargame prep
No question, analysts said, GM is eager to lead the industry’s return to production.
But while GM has “phenomenal” experience with recovery from the Fall 2019 strike, Ford and Fiat Chrysler executives actually “wargame for that kind of stuff” — so expect them to ramp up as quickly as the uncertain situation allows, said Marcus Hudson, executive director of the Calderone Advisory Group based in Birmingham, Michigan.
“GM is going out on a limb and basically saying, ‘Hey, if things go right, we can meet this date.’ It signals confidence,” he said. “They’re letting everyone know, ‘We’re raring to go, we have things lined up, we’re coordinated.’ It’s what Wall Street wants to hear.”
Contact Phoebe Wall Howard at 313-222-6512or phoward@freepress.com. Follow her on Twitter @phoebesaid. Sign up for our autos newsletter.
Read or Share this story: https://www.freep.com/story/money/cars/2020/05/13/gm-production-coronavirus/3121634001/