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Automakers announce furloughs due to COVID-19 shutdowns

Jack Stewart Apr 8, 2020
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Nissan has furloughed about 10,000 employees at plants in Tennessee and Mississippi. Christopher Furlong/Getty Images
COVID-19

Automakers announce furloughs due to COVID-19 shutdowns

Jack Stewart Apr 8, 2020
Nissan has furloughed about 10,000 employees at plants in Tennessee and Mississippi. Christopher Furlong/Getty Images
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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

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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