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Auto suppliers fret financial ruin as GM, Ford and FCA grind to a halt

Jamie L. LaReau, Detroit Free Press on

Published in Business News

On March 18, at about 4:30 p.m., the employees at auto supplier Dana Inc. in Warren, Mich., received an unsettling text message from management.

The text, obtained by the Free Press read, "We are well aware of the Ford, FCA and General Motors announcement," referring to the Detroit Three's decision earlier that day to temporary shutdown all North American assembly plants because of the coronavirus pandemic.

"Dana is reacting to our customers. Dana is currently evaluating the situation and will make a final determination as quickly as we can," the text read.

At noon the next day, dozens of day-shift workers stared at a newly posted schedule that was nearly blank.

"It showed we'd have the whole week off starting Friday until the 30th. There was nothing on it, but a few spots on day shift ... and it's voluntary," said Arron Drescher, who's worked at Dana Warren for five years.

A spokesman for Dana confirmed it is adjusting production schedules, idling some factories, and managing controllable costs, while working to keep employees safe. He would not comment on the plant in Warren.

 

Many suppliers have made the difficult decision to send workers home and run on partial shifts or not at all. In part, it's to protect their employees' health. But it's also because their biggest customers -- the car companies -- idled production after the UAW pushed to protect workers.

No one knows when that new-car production will resume, especially in light of Gov. Gretchen Whitmer's order Monday mandating most people stay at home through April 13. A UAW memo to workers at General Motors' Bowling Green plant in Kentucky Tuesday said the restart date was pushed back to April 14 from April 6.

Another looming question is if consumer demand will be there whenever production does restart considering the widespread economic impacts of the pandemic.

"That will have a significant impact on suppliers," said Jeff Schuster, president of Americas Operations and Global Vehicle Forecasts at LMC Automotive. "On the demand side, our U.S. forecast is sales will be down this year by 3 million units versus last year. A week ago, we were predicting sales would be down 500,000 to 1 million units."

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