COVID-19

Auto industry needs healthy workers, supply chains to keep up improved production

Justin Ho Jul 16, 2020
Heard on: Marketplace Morning Report
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Outbreaks of COVID-19 cases around the country could threaten the health of workers, demand and supply chains. Jeff Kowalsy/AFP via Getty Images
COVID-19

Auto industry needs healthy workers, supply chains to keep up improved production

Justin Ho Jul 16, 2020
Outbreaks of COVID-19 cases around the country could threaten the health of workers, demand and supply chains. Jeff Kowalsy/AFP via Getty Images
HTML EMBED:
COPY

Manufacturing picked up strongly in June, rising over 7%, according to data from the Federal Reserve. And within those gains, auto production saw the biggest rise.

This is, however, last month we’re talking about, and COVID-19 cases are now picking up again throughout the country.

For an auto manufacturers to keep churning out cars, Kristin Dziczek at the Center for Automotive Research said, manufacturers need healthy demand, healthy supply chains and healthy workers.

“And the outbreaks of cases around the country right now could threaten any one of those three things,” she said.

Dziczek said consumer demand is holding up for now. But supply chains are starting to see some new disruptions. Last week, the Mexican government limited staffing capacity in the state of Chihuahua.

“And there’s a heck of a lot of suppliers there,” Dziczek said.

Health concerns could impact production in the U.S., regardless of whether states mandate production halts.

Independent auto analyst Maryann Keller said we could see some self-imposed shutdowns.

“If you haven’t got workers, you can’t operate a factory, no matter what you’re told to do,” Keller said.

Two weeks ago, the union at a GM factory in Texas asked the automaker to shut down the plant, citing the growing number of cases in the region.

GM said in a statement that the plant uses protocols designed to keep the coronavirus out of the facility.

COVID-19 Economy FAQs

What does the unemployment picture look like?

It depends on where you live. The national unemployment rate has fallen from nearly 15% in April down to 8.4% percent last month. That number, however, masks some big differences in how states are recovering from the huge job losses resulting from the pandemic. Nevada, Hawaii, California and New York have unemployment rates ranging from 11% to more than 13%. Unemployment rates in Idaho, Nebraska, South Dakota and Vermont have now fallen below 5%.

Will it work to fine people who refuse to wear a mask?

Travelers in the New York City transit system are subject to $50 fines for not wearing masks. It’s one of many jurisdictions imposing financial penalties: It’s $220 in Singapore, $130 in the United Kingdom and a whopping $400 in Glendale, California. And losses loom larger than gains, behavioral scientists say. So that principle suggests that for policymakers trying to nudge people’s public behavior, it may be better to take away than to give.

How are restaurants recovering?

Nearly 100,000 restaurants are closed either permanently or for the long term — nearly 1 in 6, according to a new survey by the National Restaurant Association. Almost 4.5 million jobs still haven’t come back. Some restaurants have been able to get by on innovation, focusing on delivery, selling meal or cocktail kits, dining outside — though that option that will disappear in northern states as temperatures fall. But however you slice it, one analyst said, the United States will end the year with fewer restaurants than it began with. And it’s the larger chains that are more likely to survive.

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