COVID-19

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

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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