Coronavirus Outbreak Causes North American Carmakers to Announce Temporary Closures

On March 18, 2020, North American carmakers, including the Detroit Three, announced temporary closures of U.S. and North American manufacturing facilities until at least March 30, 2020 due to the coronavirus outbreak. Below is a summary of the closures and a brief look at the expected impact.

With backing from the United Autoworkers Union, General Motors, Ford, and Fiat Chrysler have suspended operations at all U.S. manufacturing facilities through March 30, 2020. These closures come in addition to existing closures in Mexico and Canada, and throughout Europe.
Ford has confirmed all North American production facilities will close following Thursday’s late shift and remain closed through March 30, 2020, giving the company time to sanitize and clean production facilities and develop other preventative measures.
Ford has indicated their parts distribution facilities will remain open so customers can receive supply parts as necessary.
Ford has indicated U.S. employees that have more than one year seniority will receive approximately 75% of their pay through a combination of unemployment and supplemental unemployment benefits while those with less than 1 year seniority will be eligible for unemployment.
GM has confirmed all North American production facilities will suspend operations in cadence over an unspecified period of time, giving them time to sanitize and take other preventative measures; GM has noted they will re-asses their production status on a week-by-week basis following March 30, 2020.
Fiat has not provided further details.
The work stoppage is expected to impact at least 150,000 factory employees across all three Detroit automakers.
Tesla has not yet indicated if they will follow GM, Ford, or Fiat Chrysler’s actions for a complete shutdown. Their California facility is located in a county currently subject to the Bay Area’s “shelter in place” order and remains in operation with essential employees reporting to work.
Honda Motors has stated they will close their North American operations for six days starting March 23.
BMW’s Spartanburg, SC plant remains in operation as of this posting but the company has indicated they are taking precautionary measures to separate workers.

Foley has created a multi-disciplinary and multi-jurisdictional team, which has prepared a wealth of topical client resources and is prepared to help our clients meet the legal and business challenges that the coronavirus outbreak is creating for stakeholders across a range of industries. For help with supplier issues, please contact the authors of this Client Alert or your Foley relationship partner.

Click here for Foley’s Coronavirus Resource Center to stay apprised of relevant developments, insights and resources to support your business during this challenging time. To receive this content directly in your inbox, click here and submit the form.

Disclaimer

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.