Categories
Uncategorized

Coronavirus starts to take a major toll on automakers, with thousands of jobs at risk

For every week that consumers stop buying new vehicles, the U.S. would lose roughly 94,400 jobs and $7.3 billion in overall earnings, according to one projection.

Most white-collar auto industry employees by Fiat Chrysler, Ford and General Motors are working from home this week, but Detroit’s Big 3 have formed a task force with the United Auto Workers Union to see if there’s a way also to protect hourly workers from the coronavirus without shutting down their U.S. parts and assembly lines.

With schools closed, major sports leagues suspending their seasons, large gatherings being canceled and the travel industry in freefall, automotive analysts are downgrading their 2020 sales forecasts. Morgan Stanley now anticipates U.S. demand for new cars will plunge to 15.5 million, down from last year’s 17.1 million vehicles.

There are a few, faint bright spots. Toyota, for one, reopened one of its Chinese plants in Guangzhou. But, at both the global and U.S. level, there are plenty of reasons why automakers are growing increasingly glum.

Fiat Chrysler Automobiles last week became the first automaker to confirm that an employee had a case of COVID-19. The salaried worker at the Kokomo (Indiana) Transmission Plant is now receiving medical care, while an undisclosed number of other workers who had contact with that employee have been quarantined.

Fiat also temporarily closed some of its plants in its home Italian market, including factories in Pomigliano d’Arco, Melfi, Atessa and Cassino. Together, those facilities produce about 600,000 vehicles annually, or about 4 percent of total European output.

Volkswagen is shutting down most of its European assembly plants for two weeks as the coronavirus epidemic spreads across the continent, the automaker announced Tuesday. The German automaker said it will close operations for 14 days at most of the rest of its European factories after the last shift this coming Friday, CEO Herbert Diess said.

In China, where the coronavirus epidemic began, government officials have signaled that new cases of the disease may be declining. Automakers initially closed scores of plants in late January and early February, but have begun reopening many of them.

“Companies are starting up operations but they are far from full strength. Still, millions of migrant laborers are making their way back to work, passing through quarantine procedures,” Michael Dunne, founder of automotive consulting firm ZoZo Go, told NBC News.

Recommended

OpinionTrump’s COVID-19 meatpacking order returns us to ‘The Jungle’ days just so you can eat bacon

OpinionTrump’s coronavirus testing blueprint isn’t enough. Let’s fix this before we open America.

How soon things will be back to normal at Chinese auto plants is far from clear. So far, shutdowns and slowdowns have forced closures of Hyundai plants in South Korea due to that automaker’s heavy dependence upon Chinese parts suppliers. In the U.S., manufacturers had been relying on industry backlogs to minimize the impact, but that may no longer be possible, several experts have warned.

A number of auto shows – which historically help build excitement among potential buyers – are being canceled or delayed. This month’s Geneva International Motor Show was scrubbed for the first time in its 90-year history. The Beijing Motor Show is being indefinitely postponed and the New York International Auto Show will be pushed back from April to August. It remains uncertain whether the North American International Auto Show in Detroit will go ahead as planned. This year it was set to move from its normal January date to June.

“There’s no telling how widespread or long lasting the ripple effect of the coronavirus will be for the automotive industry,” said Chris Sutton, a vice president with J.D. Power and Associates.

The loss of a single week of auto sales in the U.S. as a result of the spread of the novel coronavirus could have staggering ripple effects on the broader economy, according to data from the Center for Automotive Research in Ann Arbor, Michigan.

For every seven-day period that consumers stop buying new vehicles, the U.S. economy would lose roughly 94,400 jobs and $7.3 billion in overall earnings, CAR projected.

Categories
Uncategorized

Carmakers — and car owners — could soon feel the impact of the coronavirus

When General Motors was hit by a six-week strike last fall, the impact was quickly felt not only at the automaker’s own plants and showrooms but also at independent service shops, where repair parts for vehicles quickly fell into short supply. Now, the rapidly spreading coronavirus epidemic threatens to have the same effect.

China, the epicenter of the viral outbreak, has seen its auto industry all but shut down since late January. That is seriously disrupting the production and shipment of Chinese-made auto parts and components to the U.S., a business worth about $17 billion last year, according to the Center for Automotive Research — even more, factoring in Chinese parts first shipped to Mexico and Canada and then redirected to the United States, CAR data reveals.

Automakers such as GM, Honda and Hyundai are already struggling to maintain supplies, in many cases using air freight to keep supply lines from China open. But “between 60 to 75 percent” of the Chinese auto parts bound for the U.S. wind up in the aftermarket, according to CAR CEO Carla Bailo.

Officially, most Chinese auto plants are now open, but a report by Asian automotive consulting firm ZoZo Go this week estimated that only about 20 to 30 percent of their workers are actually back on the job. At best, those plants are operating at a fraction of their normal rate, if at all.

“There will be an impact on (U.S. vehicle) production within a month, month and a half,” Bailo said, but “it will be felt even sooner on the parts and service side,” she told NBC News.

How this plays out for vehicle owners would depend upon the brand of vehicle they’re driving and what work that vehicle might need.

Automakers such as GM, Honda and Hyundai are already struggling to maintain supplies.

China is a major producer of replacement body parts, which account for about 10 percent of that country’s global auto parts exports, or $14.2 billion last year, according to the United States International Trade Commission. Much of that goes to collision repair work. Chinese-made tires account for another 5 percent of its exports, or $7.9 billion last year. And the list of goods covers everything from suspension components to windshield wipers. The impact may also be felt by do-it-yourself fans looking for replacement parts at the local auto parts store.

“By mid-March, the shortage of supplies will be felt and members are projecting they’ll experience disruption through May or June,” even if operations in China soon get back to normal, said Stacey Miller, senior director of communications at the Auto Care Association, a trade group representing 150,000 auto aftermarket and service businesse

Categories
Uncategorized

Automakers adjust to ‘new normal’ as they prepare to reopen plants Car sales have plunged by 45 percent in the past two weeks — and that’s only because automakers have been offering incentives of more than $7,000 off some new vehicles.

A growing list of automakers hope to restart their assembly lines — some as early as this week — as manufacturers battle to prevent a record sales slump from steepening.

The 54 auto assembly lines —along with hundreds of parts plants — ground to a halt in mid-March as the extent of the coronavirus pandemic became increasingly apparent.

With new car sales drying up, that didn’t matter much for the past month. But with sales starting to rebound, according to a new report by J.D. Power, manufacturers want to be positioned to meet resurgent consumer demand.

Kia, Volkswagen and Mercedes are starting up Monday, with Honda getting people back into the factory by May 1. Fiat Chrysler and Ford are formally scheduled to start up on a rolling basis on May 4, and GM has also started advising workers they will be coming back next week. May 4 also should see Tesla, Toyota, Hyundai, BMW and Volvo start up. Subaru is set for May 11.

However, the process of reopening won’t be like flipping a switch. It will take some time to, among other things, get everyone used to the new plant layout and processes, automakers have pointed out.

The main challenge will be ensuring that employees can take their place on assembly lines without having to fear getting potentially deadly COVID-19, the disease caused by the coronavirus. Hundreds already have, with several manufacturers, including Fiat Chrysler and Ford, reporting a number of fatalities.

“There is no going back to the normal for the foreseeable future. We have to adjust to the new normal,” said Chris Reynolds, Toyota’s chief administrative officer for North American manufacturing operations. The May 4 restart date is “an opening day, not the day we’re going begin making cars,” he noted.

The Japanese automaker, which operates a network of parts and assembly plants in the Midwest and South, offered some insight into the steps it is taking to protect workers when they begin to report back next week. Work stations have been reengineered to increase the distance between workers, said Sean Suggs, president of Toyota’s big assembly plant in Mississippi. Even cafeterias have been redesigned, and plastic sheets have been installed between sinks in factory restrooms.

Line workers, meanwhile, will be wearing personal protection equipment, or PPE, similar to what’s now being used in hospitals, including masks and even face shields. Before even entering the plant, they’ll be asked about their health and have their temperature taken.

Suggs said Toyota has been networking with other automakers to share best practices for protecting line workers. Volkswagen, which plans to reopen its Chattanooga assembly line on May 3, said it has put in place 90 different steps to protect employees. Detroit’s Big Three have announced similar measures to reduce the risk of the virus spreading.

“You have to assume that every person (in a plant) is infected,” said David Yanez, chief operating officer of PTI QCS, a quality control firm working with a number of automakers to address the challenges of building cars during a pandemic. “Our culture now has to be about safety first. If workers don’t feel safe it could disrupt the entire production chain.”

“You have to assume that every person (in a plant) is infected. Our culture now has to be about safety first. If workers don’t feel safe it could disrupt the entire production chain.”

Nonetheless, Toyota’s Suggs acknowledged, “There’s a really good chance we’ll have a positive case again.”

That’s a thought that worries Julie Classen, a veteran line worker at Ford’s Michigan Assembly Plant. She was one of a number of workers at the truck factory to be stricken by COVID-19 last month. Classen has largely recovered and expects to be called back early next month.

Classen has already been shown some of the steps Ford plans to take but has “a hard time believing they’ll actually make it safe enough,” though she agrees it will help to “space out the jobs more” so there is less likelihood of direct person-to-person contact. She also worries about what it will be like trying to work while wearing all the protective gear, especially in the summer when factories such as hers can get extremely hot.

For now, automakers are set to give it a go, at least if they gain approval from states that have initiated lockdowns. One of the challenges they face is that the North American auto industry is highly integrated, so a parts plant remaining closed in one state could idle an assembly line in another. That was underscored recently when a BorgWarner factory in South Carolina was severely damaged by a tornado. That may delay the start-up of some Ford and Fiat Chrysler plants using its parts for their pickups.

Demand for those trucks has remained unexpectedly high, despite the overall slump in the U.S. new car market, noted Tyson Jominy, the head of J.D. Power’s PIN network, which tracks sales directly through real-time access to the databases of thousands of U.S. dealers. Now, other product segments are starting to show a little life.

“After many weeks of the market turning downward, what we’re seeing is a flattening (of the downturn) and indications the retail market is in recovery,” Jominy said.

Going into April, the research firm warned U.S. sales could plunge by 80 percent for the month. The numbers were off a more modest by mid-month, though still substantial — 45 percent. One reason: record incentives that have been averaging around $4,800 a vehicle over the past month and as much as $7,300 on full-size pickups. Tellingly, nearly one in four buyers opted for the 84-month, zero-interest loans that are becoming commonplace.

If anything, buyers can expect to see incentives continue to climb as automakers resume production, said Jominy, noting the best deals will be found on vehicles that have been sitting on dealer lots. Incentives on leftover 2019 models currently average around $6,600, or 50 percent more than on 2020 offerings.

But, in general, “We’re starting to see manufacturers be a bit more aggressive, to make sure they have offers compelling to buyers coming back to market,” said Thomas King, chief data officer at J.D. Power.

Categories
Uncategorized

Automakers got a bailout after the last recession, what’s their strategy this time around?

The beginning of a new month traditionally sees a burst of new vehicle sales data from automakers. This year, however, only a handful have released their numbers. The delays reflect complications related to the coronavirus lockdowns, as well as the decision by some manufacturers, including GM, to switch to quarterly reporting.

While there have been signs of a modest “recovery” in recent weeks, demand isn’t expected to approach anywhere near normal this year. That’s raising a disturbing prospect for an industry where losses are mounting fast and manufacturers are racing to shore up balance sheets to head off the sort of crisis that found two of Detroit’s Big Three automakers plunging into bankruptcy little more than a decade ago.

Last year was one of the industry’s best on record, with U.S. sales hitting 17.1 million. This year was expected to see only a modest decline, with various forecasts ranging from 16.7 million to 16.9 million. Now, however, the figure could fall as low as 12.4 million, according to analytics firm J.D.Power. And that’s assuming there won’t be another wave of the coronavirus shutting the country down again next autumn.

“People have lost their jobs or fear losing their jobs and they’re certainly not going to spend money on large-scale purchases like an automobile,” said Joe Phillippi, head of AutoTrends Consulting.

If the pandemic can’t be brought under control, especially if there’s a second wave of infections, that could threaten the very survival of weaker auto manufacturers, added Phillippi. “A lot of players are starting to sweat.”

The most vulnerable, according to industry analysts, are low-volume companies such as Mazda and Jaguar Land Rover. But large companies aren’t invulnerable.

After Ford posted a $2 billion loss for the first quarter of this year, some experts have begun to question the long-term prospects for Detroit’s second-largest automaker. Ford may even need to consider a tie-up with rival Volkswagen, with whom it formed a series of alliances last year.

“It doesn’t have to be a full merger, although I wouldn’t rule anything out,” said Adam Jonas, the widely regarded automotive analyst at Morgan Stanley, in a note to clients.

Ford has downplayed such speculation. Chief Financial Officer Tim Stone said the company has $34 billion in cash and another $35 billion in liquidity, enough to keep operating “through the end of the year.”

The impact of the coronavirus pandemic has been twofold for the auto industry, first in the form of the ongoing slump in demand. Sales started the year out well and things looked good until the latter weeks of winter. Then the bottom fell out, with March sales tumbling by about 39 percent. April was “a record down month,” according to research firm Edmunds, with sales down by 52.5 percent, barely half of what they were a year earlier.

That actually wasn’t as bad as many had forecast, Thomas King, chief data officer at J.D. Power, warned early in April that sales could plunge as much as 80 percent as most of the country went into lockdown to try to reduce the spread of the coronavirus.

It helped that manufacturers rushed in with hefty new incentives, and the fact that many dealers have rapidly adopted new strategies to work around pandemic lockdowns, including online retailing and contactless deliveries.

“It has been breathtaking to me to see how fast that has happened,” Jim Farley, Ford’s chief operating officer, said Thursday.

Overall, the downturn has created a situation for the auto industry similar to that facing oil producers who now have such a glut of crude they’re running out of places to store it. New car dealer lots are overflowing and manufacturers have had to lease space to handle all the excess vehicles they produced before factories were forced to shut down in March.

The Jupiter Spirit, an automotive cargo ship bound from Japan to the U.S. with 2,000 Nissan vehicles on board, arrived at the Port of Los Angeles on April 24 after a three-week journey. It spent five days anchored a mile offshore, however, since there were no places left to unload its cargo, Bloomberg reported.

On the plus side, the huge inventory build-up has made it easier for the industry to weather the ongoing shutdown of production across the world.

In the U.S., manufacturers continue to push back the timing of most plant start-ups. With large portions of their production base located in Michigan, Detroit’s Big Three will likely delay again now that Gov. Gretchen Whitmer has extended that state’s lockdown through May 28.

Manufacturers are hoping that lessons learned during the Great Recession can be put in play today to weather the latest storm.

Ford has scrapped plans to develop an all-electric SUV for its Lincoln brand as part of a joint venture with EV start-up Rivian. General Motors has reportedly pushed back development of a number of vehicles, including several versions of its Chevrolet Corvette sports car.

Ford and GM have both taken steps to shore up their balance sheet. GM has stopped its dividend payments, canceled a stock buyback program, and delayed the payoff of a revolving credit line.

Ultimately, Phillippi said, “the problem is that there are just so many unknowns.”

When will the industry be able to get back into production? Will there be enough buyers? Will the coronavirus return, triggering another round of lockdowns and plant closures that could do even more damage to the global economy than what we’ve already seen?

If that happens, automotive analysts warn, that would create a crisis far worse than what was seen during the Great Recession.

Categories
Uncategorized

Guys, have you seen this crazy looking Toyota i-ROAD

This is a completely covered motorcycle-cum-car which is weird but also really cool too. Have you seen one like that before?

Toyota has been seriously investing in Battery Electric Vehicles BEV, as they push for a stronger presence in the EV industry even as the world is moving towards an era devoid of fossil fuel-powered vehicles. One of its most appealing BEV offering, the Toyota i-ROAD is one ride that should really interest you and me.

Toyota says the i-ROAD is more of a short-distance mobility solution, which is more like a motorcycle in terms of size but comes with a suspension system that is similar to that you find in cars. Yes, while it doesn’t have the range of a flying car, this can still get you to point B in style.

Check out how the i-ROAD performs on the road in this video:

Toyota i-ROAD test drive

1. Wheels and suspension

The i-ROAD comes with three wheels, two in front and one bigger wheel behind. Toyota calls the suspension system on the front wheels the Active Lean Suspension, which allows the two front wheels to move independently. The i-ROAD is designed in such a way that it leans over whenever the driver takes a bend or tries to take a corner.

This feature is made possible as a result of the two front wheels being able to shift on their suspensions. So when you are taking a bend, you will notice that one wheel seems to slide forward leaving the other wheel in its natural position.

toyota-i-road-making-a-bend

The i-ROAD comes with the Active Lean system for improving stability and control

2. Interior and exterior facts

When it comes to the interior, the seat is just fine for a motorcycle but offers improved support and comfort. The steering is the standard steering wheel you find on most Toyota built saloon cars with the dashboard area offering a standard USB port for charging your mobile devices. The I-ROAD’s body is built with plastic and is said to weigh just about 660 lbs. The i-ROAD is so designed that you are isolated from the outside with window panes and a top area that is dressed with canopy. You also have windscreen wipers incorporated especially for the rainy season. 

toyota-i-road-interior-view

The i-ROAD comes with standard steering wheels like what you find in normal cars

3. Power and performance

One the power side, the i-ROAD comes with a lithium-ion electric battery pack that holds as much as 30 miles of electric charge before you will need to recharge. But to recharge it, you will need a 120-volt electric source as a recommendation for the battery to reach a full charge in 3 hours. However, you may still use electric sources with lower power rating but you should expect that it will take longer than 3 hours to reach full charge. The i-ROAD is front wheels driven, with both wheels being powered by a 2 KW electric motors, supporting the BEV to a top speed of 37 mph.

On the performance side, the i-ROAD comes with a software-controlled traction control system that makes sure the i-ROAD gets adequate road grip even on wet and slippery surfaces, especially noticed during and after rainfall. Also, the i-ROAD comes with an internal safety mechanism that warns the driver if he exceeds the allowed speed limit, especially when taking a turn. The driver will notice the steering wheels vibrating to warn him/her of the dangers of continuing at such speeds, even as the sonar sensors help in stability and balancing.

toyota-i-road-front-view

The i-ROAD is powered by its two front wheels

toyota-i-road-rearview

The rear wheels also turn to offer extra turning radius at the rear

Categories
Uncategorized

‘Credible database crucial to palliatives distribution’

“A robust citizen identification database will make the distribution of palliative effective in this lockdown era, a public affairs analyst, Mr. Lukman Mamudu has said. “The citizenry will be quite happy to stay indoors if you can create the right ‘prison conditions and resources’, he said. Mamudu who is the CEO of Transtech Industrial Consulting Ltd in a statement urged the President to make data capturing a precondition to benefit from the palliatives He said the COVID-19 outbreak offers an opportunity to deepen the country’s data base of citizens.

According to him, the strategies to “curtail and manage COVID-19 hinge on a nation’s ability to command citizen’s compliance with measures including those prescribed by its public health authorities.” “This is the opportunity that the existing National Identity Card Management platform offers. Let’s seize the time now and deepen the database by emergency citizens’ registrations,” he added. He said having spent billions of Naira to build “a very robust national identity card platform,” the President should “pronounce that registration on this platform be declared as precondition to benefit from palliative and even treatment (we need to be careful on those needing treatment. Those can be captured at point of treatment) measures.” According to him, this would convince Nigerians and international community of the sincerity of government’s efforts at providing palliatives. He also advised that the national database should be populated with citizens in the informal sector.

Read more: https://www.dailytrust.com.ng/credible-database-crucial-to-palliatives-distribution.html