GM Scrambles to Shield U.S. Plants From Virus Disruption
by David Welch- Carmaker doesn’t expect parts shortage, but situation fluid
- Fiat joins Hyundai, Renault in idling factories outside China
General Motors Co. is working to maintain the flow of parts to some of its most profitable U.S. plants to keep them from becoming the next factories idled by the coronavirus spreading in China.
The automaker doesn’t expect to have to pause production at plants in Michigan, Indiana and Texas, according to David Barnas, a GM spokesman. He commented after a United Auto Workers union member at its heavy-duty pickup factory in Flint, Michigan, said the threat of parts shortages at the facilities is growing.
“We continue to monitor our supply chain and are in close communications with our tier-one suppliers to mitigate any risk to production in North America,” Barnas said in an email. “The situation is still quite fluid, but GM, other automakers and suppliers have begun the process of restarting vehicle and parts production in China.”
The UAW member’s letter -- which said GM’s factories in Fort Wayne, Indiana; Arlington, Texas; and Flint could run out of certain parts -- was first reported earlier Friday by The Detroit Bureau. The plants assemble Chevrolet Silverado and GMC Sierra trucks and full-size sport utility vehicles including the Cadillac Escalade, some of the company’s most lucrative models.
Fiat Chrysler Automobiles NV on Friday became the latest carmaker to announce that a lack of components sourced from China will disrupt production in other countries, joining companies including Hyundai Motor Co., Nissan Motor Co. and Renault SA.
GM shares fell more than 2% while Fiat Chrysler dropped as much as 1.5% as of 1:15 p.m. Friday in New York trading.
Researcher IHS Markit slashed its projection for global light-vehicle production in the first quarter, citing a sharp decline in output from China, analysts at JPMorgan Chase & Co. said in a report Friday.
IHS now estimates there will be an 11% drop in worldwide production for the first three months of the year, worse than the 6% decline it was expecting in mid January. The researcher is forecasting a 27% plunge in China, compared with 13% previously.
(Updates with GM shares in sixth paragraph.)