Vanmala Subramaniam, Emily Jackson, Financial Post
March 18, 2020
Less than 24 hours after the United Auto Workers union called for the temporary shutdown of auto factories across North America, two of the Big Three automakers confirmed they would be suspending manufacturing operations in the continent to curb the spread of COVID-19.
In a statement, Ford Motors Co. said that production at its U.S., Canadian and Mexican manufacturing facilities would be halted after Thursday evening’s shifts to March 30, to “thoroughly clean and sanitize the company’s plants.”
Ford in Canada employs 4,600 workers at its assembly plant in Oakville, Ont. Ford also builds engines in Windsor, Ont. and Essex, Ont., where it employs about 1,500 and 800 people respectively.
The company confirmed it had temporarily closed a building at its Michigan assembly plant on Wednesday after an employee tested positive for COVID-19.
General Motors Canada will also be suspending manufacturing operations until at least March 30, spokeswoman Jennifer Wright said in an emailed statement. GM Canada has not yet determined when each of its three Ontario-based plants will close, but said production status will be reviewed weekly.
As it stands, about 2,500 employees build the Chevrolet Equinox at the CAMI Assembly Plant in Ingersoll, 1,200 workers make engines at the St. Catharines Propulsion Plant and 300 people manufacture stamped products at the plant in Oshawa.
FCA did not immediately respond to questions about its operations in Canada. It operates two vehicle assembly plants in Canada. In Windsor, about 5,600 employees manufacture Chrysler minivans. In Brampton, about 3,400 employees build the Chrysler 300, Dodge Charger and Dodge Challenger.
Toyota Motor Corp. will also suspend its automotive manufacturing facilities in Canada, albeit only for two days, in light of an expected drop in demand due to COVID-19’s expected economic impact.
The Japanese automaker will halt production across all operations in North America on Mar. 23 and Mar. 24 to conduct a thorough cleaning of its facilities, Toyota Canada spokesman Michael Bouliane said in an email.
Toyota employs about 8,000 people at three facilities in Ontario. Workers build the Corolla, Lexus RX 350 and 450 at two plants in Cambridge and the RAV4 in Woodstock.
The shutdowns would likely affect jobs and revenues at Canada’s small parts firms, which employ about 100,000 people and ship roughly $100 million worth of goods each day, most to automakers in the United States.
Indeed, more than 90 per cent of the parts produced in Canada by Martinrea International are sold to Detroit automakers. The firm — which employs 17,000 people globally and 2,500 in Canada — is already planning to lay off workers and shut down operations in Europe, where most carmakers have already closed plants.
“We’ll be doing some of that in Europe,” said Rob Wildeboer, executive chairman of the firm. “As of this moment, we haven’t done it in North America but that’s typically what we do when the auto plants close.”
Martinrea International shares fell 3.7 per cent to $7.29, Magna International Inc. plunged 19.4 per cent to $36.40, while Linamar dropped just over 1.9 per cent to $28.63 per share.
On Tuesday, Ontario declared a state of emergency, shutting down all non-essential services including schools, childcare centres, bars and restaurants, but manufacturing facilities, construction sites and office buildings were allowed to stay open.
That same day, Unifor — the union that represents the Big Three auto workers in Canada — joined forces with GM Canada, FCA Canada and Ford Canada to form a taskforce that would review production status and communicate with local unions about how to keep workers and their families protected from the virus.
At Ford Canada’s plant in Oakville, a sign was posted on a notice board with the subject line: “Temporary Layoff — Commencing March 20th, 2020.”
“Oakville Assembly Complex is scheduled for a temporary layoff and production operations will be suspended,” the sign read. “Unless you are otherwise notified by your Process Coach, you will not be required to work during this layoff period.”
As it stands, the automakers are not planning to pay their workers during the shut down, Unifor president Jerry Dias said Wednesday. The big three automakers will temporarily lay off their employees, meaning thousands of workers will be seeking EI, Dias said.
“These are companies that are doing very well. I understand that this is unprecedented time, this isn’t the company’s fault,” he said. “They can certainly for a period of time do better.”
Multiple factory workers at Ford Canada’s plant in Oakville had expressed frustration and worry that they still had to continue working on the assembly despite a province-wide shutdown and repeated reminders by public health officials to stay at home.
The workers, who spoke to the Financial Post on condition of anonymity, said that up until Tuesday evening, when they received a handout urging them to take precautionary measures in light of COVID-19, there was almost no mention of the virus by management.
“They told us stay home if you don’t want to come, but you won’t get paid. The regular rule is, if you are off for five or more days, without a medical note, you will be fired,” said one worker, who declined to be named.
“I feel very worried about going into work everyday. I’m on the assembly line, there are 2,000 of us touching one car every 40 to 50 seconds and I have heard nothing about precautions we should be taking,” said another worker, who also declined to be named.
The handout, obtained by the Financial Post, said the auto giant had implemented travel restrictions between facilities and increased the cleaning and disinfecting frequency of hard surfaces, common areas, break rooms, restrooms and meeting rooms during each shift.
“If someone that works at one of our plants tests positive for COVID-19, we will close the building in which that person works for 24 hours to be deep-cleaned and disinfected,” the handout, signed by John Savona, VP of North America Manufacturing stated.
There was also a directive in the handout to self-isolate for 14 days if workers were returning from outside Canada, but it was unclear if they would be compensated for the time off.
Ford Canada did not immediately respond to the Financial Post’s request for clarification on these matters.
The last time Detroit’s Big Three automakers closed all of their factories in unison was following the Sept. 11 terrorist attacks. But auto plants routinely shut down for two week periods in both July and at Christmas to manage inventory and complete other tasks.
“Where this would be unprecedented is if it is indefinite,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. “But I don’t think we’re there yet.”