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Volkswagen joins list of automakers closing factories due to coronavirus

As governments implement stricter social distancing measures to slow the spread of novel coronavirus, formally known as COVID-19, automakers are beginning to shut down factories in North America and Europe.

Honda announced on Wednesday that it would suspend production at all assembly plants in the United States, Canada, and Mexico for six days beginning March 23. The suspension is due to “an anticipated decline in market demand” related to the pandemic, a Honda statement said.

Engine and transmission factories that supply Honda’s North American assembly plants will close during the same period. Honda said it will continue full pay for all 27,600 workers affected by the shutdown and will use the downtime to clean all facilities. The automaker expects the six-day stoppage to reduce production by 40,000 cars.

Honda plans to resume production on March 31, and said it will implement a “measured approach to sales that aligns production with market demand.”

Ford and General Motors soon joined Honda, announcing temporary production shutdowns at all North American factories. The two largest U.S. automakers, along with Fiat Chrysler Automobiles (FCA) and the United Auto Workers (UAW), previously created a coronavirus task force to provide better protection to workers, but those plans will largely be mooted by factory closures. FCA has said it will institute rotating shifts to maintain social distancing between workers.

Ford said it would halt production at all factories in the U.S., Canada, and Mexico after Thursday evening’s shifts, and keep the factories closed until March 30. The facilities will be cleaned during the shutdown, a Ford statement said. Ford did not discuss payment for idled workers but said it would use the downtime to work with the UAW on social distancing practices for when the plants reopen. The automaker has already closed its Michigan Assembly Plant because an employee tested positive for COVID-19.

GM has also suspended production until March 30, and status will be “reevaluated week-to-week after that,” according to a statement from the automaker. As with Ford and Honda, GM plans to clean factories while they are idled. In addition to employee health concerns, GM cited “market conditions” as a reason for the shutdown.

Nissan will close all North American factories March 20 through April 6. Volkswagen will close its sole U.S. factory, located in Chattanooga Tennessee, on March 21, but plans to reopen March 29.

Toyota initially said it would close all of its North American factories, but only for a two-day span between March 23 and March 25. The shutdown was subsequently extended to April 3.

Hyundai shut down its Montgomery, Alabama, factory following a confirmed case of COVID-19 March 18. The automaker said it is disinfecting the factory in accordance with Alabama Department of Public Health protocols, and did not say when the factory would reopen. The automaker hasn’t announced any other North American plant closures.

Tesla closed its Fremont, California, factory to comply with a statewide lockdown order from Governor Gavin Newsom issued Thursday. Tesla initially tried to keep the factory open, but the Alameda County Sheriff subsequently confirmed via Twitter that car production was not considered essential.

The Sheriff said Tesla could continue “minimum basic operations,” defined as “the minimum necessary activities to maintain the value of the business’s inventory, ensure security, process payroll, and employee benefits, or for related functions,” as well as “the minimum necessary activities to facilitate employees of the business being able to continue to work remotely from their residences.”

Tesla was forced to temporarily close its Chinese factory in January as part of nationwide efforts to contain the outbreak there. CEO Elon Musk suggested on Twitter that the California factory could be repurposed to make ventilators, and other automakers have discussed similar plans.

Coronavirus as also affected luxury automakers. Rolls-Royce confirmed Wednesday that it would suspend production at its Goodwood, England, factory for two weeks beginning March 23. Bentley and Bugatti said they would halt production at their factories, in England and France, respectively, two days later.

Shutting down factories is a response not only to the pandemic but also to an anticipated decline in car sales. Social distancing measures are likely to reduce traffic in showrooms, and the economic impact of those measures will also deter people from making big purchases.

Updated on March 20, 2020: Added confirmation of Volkswagen and Bugatti factory shutdowns and extension of Toyota shutdown.

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