Update: Big Three Automakers Could Restart Production On May 18

Assembly plants have been idled since mid-March

2021 Chevrolet Tahoe production
The Big Three automakers’ assembly plants may restart production on May 18, according to new reports. [Photo: General Motors]

Detroit’s Big Three automakers — Fiat Chrysler, Ford and General Motors — are aiming to restart their production lines on May 18, according to sources familiar with the plans. The news came after each of the three worked out a timeline in which to reopen their plants, amid concerns from the United Auto Workers (UAW) union that opening too early in May could put workers at greater risk of contracting coronavirus.

Michigan governor Gretchen Whitmer also extended the state’s stay-at-home order last Friday through May 15, which impacted plans to reopen any sooner. To date, the state has suffered nearly over 3,400 deaths and 38,000 confirmed coronavirus cases. For its part, the UAW expressed concern last week that reopening in early May could put workers at risk, as the necessary safety protocols necessary to keep workers healthy may not be in place.

The Wall Street Journal notes that the UAW and other automakers have not made official announcements on whether a satisfactory deal had been reached. Ford has not made an official announcement as to when it would restart production, but a spokesperson did say the company is “continuing to assess public health conditions, government guidelines and supplier readiness to determine when the time is right to resume production.”

Production lines have been idled for more than six weeks, as automakers aim to reopen next month. [Photo: Ford]

The crisis will have long-lasting effects

General Motors announced Monday that it extended a $3.6 billion revolving credit agreement to April 2022 in order to increase shore up its balance sheet. The company also suspended its quarterly cash dividend on common stock and its share buyback program.

All of Detroit’s Big Three have been burning through cash in the wake of the crisis. As they offer steep discounts and generous incentives to keep sales ticking along, both Ford and GM tapped credit lines totaling more than $15 billion, while FCA also tapped $9 billion in credit lines and added further lines should they be needed.

Given the circumstances, most workers won’t be able to immediately return to work, even if the companies do restart production on May 18. As states ease stay-at-home restrictions, some emphasize a gradual approach to reopening business, and factories will need to ramp up to return to their pre-shutdown capacity. The COVID-19 crisis has also disrupted global supply chains, meaning critical parts may not reach assembly plants to kick production back into high gear, even if a plant’s workers have returned.