Tesla and Detroit automakers get green light to reopen plants

[NEW YORK] Michigan and California's governors are allowing manufacturers to open up factories in the coming days, delivering a boost to Tesla and Detroit's three carmakers.

California Governor Gavin Newsom will let manufacturers resume operations starting Friday, while Michigan's Gretchen Whitmer cleared the way for them to reopen beginning May 11. Ford Motor on Thursday joined General Motors (GM) and Fiat Chrysler Automobiles in scheduling the restart of North American plants for May 18.

"We're not out of the woods yet, but this is an important step forward," Ms Whitmer said in a statement. "This is good news for our state, our businesses, and our working families."

Ms Whitmer's decision clears the way for parts suppliers to start running their assembly lines to support vehicle plants resuming production later this month. Mr Newson's announcement elicited a cheer from Tesla chief executive officer Elon Musk, who has sharply criticised shutdown orders.

Michigan is providing clear guidance for auto companies, component makers and factory workers after weeks of uncertainty about the timing. Most auto output ground to a halt in mid-March to slow the spread of the coronavirus and brace for a slump in car demand from home-bound consumers.

Losing just two weeks of production cost GM US$600 million in cash in the first quarter, and carmakers have been borrowing money to tide them over during a shutdown likely to hurt second-quarter earnings even more.

The United Auto Workers (UAW), whose members man the assembly lines at Ford, GM and Fiat Chrysler, has resisted earlier efforts to reopen plants. But the union's president, Rory Gamble, signalled earlier this week the UAW would defer to the manufacturers after participating in meetings with them on safeguarding worker safety.

"The companies contractually make that decision and we all knew this day would come at some point," Mr Gamble said in a statement. "Our UAW focus and role is and will continue to be, on health and safety protocols to protect our members."

Under Ms Whitmer's new executive order, manufacturers must implement a series of measures designed to protect workers from Covid-19. These requirements include a daily screening protocol when workers enter plants, including a questionnaire and temperature checks "as soon as no-touch thermometers can be obtained".

They must also create dedicated entry points at every facility and suspend visits by all personnel deemed non-essential such as factory tour guests. Ford, GM and Fiat Chrysler already have those protocols in place.

BLOOMBERG