Automakers announce furloughs due to COVID-19 shutdowns
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Honda, Nissan and now Tesla are adding themselves to the list of car companies triggering mass furloughs of factory workers. The companies say their people will continue to get benefits, and they expect to have jobs for them on the other side of this mess.
Honda calls these “difficult actions” in “unprecedented circumstances.” It says it will stop paying almost 17,000 workers in the U.S. and Canada until May 1. Tesla is furloughing all non-essential workers. Its plan is to reopen May 4.
Around 10,000 hourly employees at Nissan are affected by what the company stresses is a “temporary layoff.”
“It’s so important for these car companies to keep their workforce intact,” says Jessica Caldwell, who monitors the auto industry for Edmunds. “A lot of the jobs that these factory workers do are skilled, and they’ve built up a talent over time.”
Automakers don’t want to have to rehire and retrain. They want to be able to restart production quickly. That’s why Honda, Nissan, and the Detroit automakers expect workers to be able to come back to their current roles, and until then, qualify for unemployment benefits.
Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research cautions it could be a while: “We’re not going to be back up at 100% utilization of these plants and this workforce for some time. It’s going to be a slow ramp-up on the other side.”
She says production can’t restart fully until there’s demand — people buying cars — and all the hundreds of auto suppliers around the world are up and running, too.
COVID-19 Economy FAQs
Which businesses are allowed to reopen right now? And which businesses are actually doing so?
As a patchwork of states start to reopen, businesses that fall into a gray area are wondering when they can reopen. In many places, salons are still shuttered. Bars are mostly closed, too, although restaurants may be allowed to ramp up, depending on the state. “It’s kind of all over the place,” said Elizabeth Milito of the National Federation of Independent Business.
Will you be able to go on vacation this summer?
There’s no chance that this summer will be a normal season for vacations either in the U.S. or internationally. But that doesn’t mean a trip will be impossible. People will just have to be smart about it. That could mean vacations closer to home, especially with gas prices so low. Air travel will be possible this summer, even if it is a very different experience than usual.
When does the expanded COVID-19 unemployment insurance run out?
The CARES Act, passed by Congress and signed by President Donald Trump in March, authorized extra unemployment payments, increasing the amount of money, and broadening who qualifies. The increased unemployment benefits have an expiration date — an extra $600 per week the act authorized ends on July 31.
You can find answers to more questions here.
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