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The United Auto Workers Union Signals its Approval for Fiat Chrysler to Reopen its North American Plants

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【Summary】The United Auto Workers Union, which represents U.S. auto plant workers, has given its nod of approval on Tuesday for Detroit’s big three automakers to restart vehicle production amid the coronavirus pandemic, after Fiat Chrysler Automobiles NV (FCA) announced it expects to reopen its North American plants on May 18.

FutureCar Staff    May 05, 2020 3:30 PM PT
The United Auto Workers Union Signals its Approval for Fiat Chrysler to Reopen its North American Plants
A Dodge Ram pickup at FCA's Warren Truck Assembly Plant in Warren, Michigan.

The United Auto Workers Union, which represents U.S. auto plant workers, has given its nod of approval on Tuesday for Detroit's big three automakers to restart vehicle production amid the coronavirus pandemic, after Fiat Chrysler Automobiles NV (FCA) announced it expects to reopen its North American plants on May 18, Reuters reported.

FCA will become the first of Detroit's big three automakers to resume production after nearly two months of its plant's being idle due to the coronavirus. The automaker hinted its intentions to reopen its North American factories by May 18 when the company reported its first-quarter results on Tuesday.

FCA operates 23 manufacturing plants in the U.S. and six more in Canada.

The United Auto Workers union has been negotiating with FCA, General Motors and Ford Motor Co over the safest way to reopen the factories to prevent its members from getting sick. The plants have been idle since March, as coronavirus cases began to spike in the U.S.

"We continue to advocate for as much testing (for the disease) as possible at the current time and eventually full-testing when available," UAW President Rory Gamble said in a statement to Reuters. "As for the start date, the companies contractually make that decision and we all knew this day would come."

Like most global automakers, FCA was hit hard by the coronavirus pandemic that began in January. The automaker reported a $1.8 billion loss for the first quarter of 2020, as auto sales fell sharply around the globe. Without restarting its factories this month, FCA faces an equally brutal Q2, as do its rivals.

General Motors and Ford have yet to announce their restart dates, but the U.S. automakers are looking to restart production so they can start bringing in much-needed cash. FCA's U.S. rival Ford Motor Co reported a loss of $2 billion in the first quarter of 2020.

FCA produces the popular Ram pickup and Jeep vehicles. The automaker saw strong sales in the U.S. last year. FCA sold 703,023 Ram pickups in the U.S. in 2019, boosted by brisk sales of the all-new Ram Heavy-Duty, Ram 1500 and Ram 1500 Classic models. Ram brand sales overall were up 18% in the U.S. last year. The Grand Cherokee SUV reached sales of 242,969 units last year. 

The Trump administration is pushing for businesses and factories to reopen, even as coronavirus cases continue to rise in certain parts of the country. However, the focus in the auto sector has shifted to when production can safely restart.

Michigan Governor Gretchen Whitmer, who has publicly feuded with President Trump over the state's shelter-in-place orders, previously extended the state's stay-at-home order through May 15, but lifted restrictions for some businesses other than manufacturing. 

In neighboring Ohio, where FCA, Ford and Honda have assembly plants, the state's Governor Mike DeWine is allowed manufacturing to resume on Monday, and Whitmer is facing increasing pressure to follow suit.

Ford said on Tuesday it had not determined when to restart its North American production.

"We are continuing to assess public health conditions, government guidelines and supplier readiness to determine when the time is right to resume production," Ford spokeswoman Kelli Felker said in an email to Reuters.

Last week, Ford outlined the safety measures it will institute to restart its U.S. plants and said getting clearance from Michigan would be the last step. GM and FCA have instituted similar measures at their plants, which includes making available personal protection equipment and hygiene items for its employees, such as masks and sanitizer. 

In addition, Detroit's automakers plan to employ best-practices recommendations from the U.S. Centers for Disease Control and Prevention and the World Health Organization (WHO) to minimize risk to their employees.

The president of the UAW previously said early May was "too soon and too risky" to resume production, adding that members of his own family would be among those reporting to plants. His previous rule for automakers was asking whether they felt it was safe enough to send their own family members into plants.

Last week, Ford Chief Operating Officer Jim Farley said he would "absolutely" be comfortable having his family working at a Ford plant, given the steps taken to ensure employee safety.

"We must implement and follow these guidelines and self-reporting procedures we have worked out," Gamble said on Tuesday, referring to guidelines on worker health and safety.

"And the UAW will fulfill its role to continue to actively monitor and aggressively respond regarding all issues impacting the health and safety of UAW members in whatever manner may be necessary as we return to the worksite."

The automotive industry in the U.S. accounts for 6% of gross domestic product, supporting more than 7 million jobs, including suppliers and dealers. Therefore, restarting auto production has become a top priority in helping the U.S. economy recover from the cornoavirus pandemic.

resource from: Reuters

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