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Coronavirus Outbreak Causes North American Carmakers to Announce Temporary Closures

On March 18, 2020, North American carmakers, including the Detroit Three, announced temporary closures of U.S. and North American manufacturing facilities until at least March 30, 2020 due to the coronavirus outbreak. Below is a summary of the closures and a brief look at the expected impact. 

  • With backing from the United Autoworkers Union, General Motors, Ford, and Fiat Chrysler have suspended operations at all U.S. manufacturing facilities through March 30, 2020. These closures come in addition to existing closures in Mexico and Canada, and throughout Europe.

  • Ford has confirmed all North American production facilities will close following Thursday’s late shift and remain closed through March 30, 2020, giving the company time to sanitize and clean production facilities and develop other preventative measures.

  • Ford has indicated their parts distribution facilities will remain open so customers can receive supply parts as necessary. 

  • Ford has indicated U.S. employees that have more than one year seniority will receive approximately 75% of their pay through a combination of unemployment and supplemental unemployment benefits while those with less than 1 year seniority will be eligible for unemployment. 

  • GM has confirmed all North American production facilities will suspend operations in cadence over an unspecified period of time, giving them time to sanitize and take other preventative measures; GM has noted they will re-asses their production status on a week-by-week basis following March 30, 2020.

  • Fiat has not provided further details.

  • The work stoppage is expected to impact at least 150,000 factory employees across all three Detroit automakers. 

  • Tesla has not yet indicated if they will follow GM, Ford, or Fiat Chrysler’s actions for a complete shutdown. Their California facility is located in a county currently subject to the Bay Area’s “shelter in place” order and remains in operation with essential employees reporting to work.

  • Honda Motors has stated they will close their North American operations for six days starting March 23.

  • BMW’s Spartanburg, SC plant remains in operation as of this posting but the company has indicated they are taking precautionary measures to separate workers. 

© 2020 Foley & Lardner LLPNational Law Review, Volume X, Number 79

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About this Author

Christopher R. Boll, Foley Lardner, Transactional Lawyer, Securities Attorney
Associate

Christopher R. Boll is an associate with Foley & Lardner LLP, and a member of the Transactional & Securities Practice.

During law school, Mr. Boll interned with GE Capital and received the Henry Hubschman Fellowship at GE Capital Aviation Services. Before pursuing a legal career, Mr. Boll was an investment banking associate with Falls River Group, LLC, and IMAP, Inc., where he advised and consulted on joint ventures, acquisitions, mergers, and other strategic ventures in various industries and stages of corporate lifecycles. While...

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Ann Marie Uetz, Foley Lardner, Debtor Representation, Bankruptcy Lawyer
Partner

Ann Marie Uetz is a partner and trial attorney with Foley & Lardner LLP, where she represents clients in a variety of industries in all aspects of their contracts and business disputes. She also represents debtors, creditors and secured and unsecured lenders in all facets of restructuring. Ms. Uetz focuses her practice on business litigation and bankruptcy, two of Foley’s practice areas recently ranked by U.S. News—Best Lawyers® as “national First-Tier” practices in recognition of excellence in client service.

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