European auto factories are reopening - what it means for Alabama
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Auto factories in Europe are gingerly starting to reopen, as pandemic measures to blunt the coronavirus pandemic begin to lift across the region. These companies actions could indicate the way ahead for Alabama’s auto industry, which has been largely idle for the last month.

In mid-March, the factory production schedules fell like dominoes around Alabama as the pandemic began. Hyundai’s Montgomery plant, which shutdown March 18 when a worker tested positive for COVID-19, is scheduled to resume production May 4. The company said originally that the halt was only to extend through the end of March, then later announced work would resume April 13.

Mercedes-Benz has said its production halt at the Vance plant will continue through April 20. The factory halted production on March 23. Honda announced it would suspend production at its Lincoln plant beginning March 23, which the company later extended through May 1.

Meanwhile, the state’s largest economic development program, the opening of the $1.6 billion Mazda Toyota manufacturing plant in Huntsville, has been delayed to later next year because of the pandemic. Toyota’s Huntsville engine plant, which employs more than 1,300 people, hasn’t stayed totally inactive. It is producing thousands of face shields for healthcare workers.

About 40,500 people in Alabama work at the plants and their affiliated supply factories, and the extended idle period has had a disastrous effect on the workforce. Of the 198,685 people who filed for unemployment in Alabama from March 21 through April 4, 25,709 were classified as being employed in manufacturing. It is unclear how many of these are auto-related jobs.

Nationally, the Federal Reserve reported today that manufacturing output dropped 6.3 percent in March, led in large part by auto factories, which saw a 28 percent fall. It was the biggest decline since the end of the Second World War.

The economic hit is two-fold though for automakers, as plants have closed to contain the virus, but have remained closed due to the expected hit in demand for automobiles globally.

One can see the effect in sales. Take Mercedes-Benz. The year for the German automaker started out hot, with a significant increase in global deliveries in January. But the company finished the first quarter with sales down 14.9 percent, according to sales figures.

There’s also indications of what how the virus has already weakened other markets. CNN is reporting that Chinese car sales declined 42 percent in the first quarter of 2020 compared to last year. Wuhan, the epicenter of the pandemic, is an auto manufacturing hub.

Europe is being watched for several reasons. More than 83,000 people have died there of coronavirus, with more than 894,000 testing positive, according to the European Centre for Disease Prevention and Control. The region has also seen some of the most stringent lockdown measures designed to check the spread of the virus.

According to Financial Times, Toyota, Renault, Hyundai, Volkswagen and Volvo are among those that have opened or are preparing to restart production at sites over the next few weeks. Toyota, for example, plans to restart next week at plants in France and Poland, though on reduced schedules. Hyundai has already restarted at its Czech Republic facility, also on scaled back production.

Bloomberg is reporting Mercedes-Benz parent company Daimler AG will be watching as German Chancellor Angela Merkel is expected to discuss easing restrictions with leaders of the German states this week.

Analysts say moves are likely to be gradual, and may slow further if the coronavirus regains a foothold.

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