COVID-19

What will manufacturing look like as companies start to reopen?

Mitchell Hartman May 27, 2020
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More automation could be a solution to crowded, hands-on production lines. Ethan Miller/Getty Images
COVID-19

What will manufacturing look like as companies start to reopen?

Mitchell Hartman May 27, 2020
Heard on:
More automation could be a solution to crowded, hands-on production lines. Ethan Miller/Getty Images
HTML EMBED:
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There have been some recent signs of slight economic improvement in May — now that states and businesses are tentatively reopening.

That reopening includes manufacturing, where, for example, auto plants have started ramping up production again. That comes along with new health monitoring and assembly-line precautions to keep workers safer.

The Federal Reserve Bank of Richmond’s manufacturing index for May rebounded from a record low, but it’s still at its lowest level since 2009.

Manufacturers of autos and aircraft, oil and gas producers have all been hit hard by plummeting business and consumer spending.

Even in sectors where demand is still high, like food processing, the coronavirus has infected workers and slowed production. Arun Sundaram at CFRA Research says some meatpacking plants shut down, retooled and reopened.

“Not to the full capacity pre-COVID-19,” Sundaram said. “There are still challenges keeping workers safe, social distancing within the plants.”

Increased automation and the use of more robots could be a solution to crowded, hands-on production lines.

But Ned Hill, at the Ohio Manufacturing Institute at Ohio State University, says in the near-term, don’t bet on it.

“I don’t expect to see lots of capital investment,” Hill said. “Companies right now are trying to pay attention to their burn rate on cash, to make sure they stay open.”

Manufacturers laid off 1.3 million workers in April.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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