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Detroit automakers keep their masks on to keep the factories running

United Auto Workers members leave the Fiat Chrysler Automobiles Warren Truck Plant in May. Fiat Chrysler along with rivals Ford and General Motors Co., restarted the assembly lines after several weeks of coronavirus lockdown. (AP)   DETROIT — When the coronavirus pandemic slammed the United States in March, the Detroit Three automakers shut their plants and brought their North American vehicle production to an unprecedented cold stop. Now, four months after a slow and sometimes bumpy restart in May, many General Motors, Ford and Fiat Chrysler Automobiles  factories are working at close to full speed, chasing a stronger-than-expected recovery in sales. So far, none of the Detroit Three has had a major COVID-19 outbreak since restarting production, even as the coronavirus is surging in Midwestern and Southern communities outside factory walls. "We have people testing positive, but it's not affecting operations," said Ford global manufacturing chief Gary Johnson. Keeping the pandemic at bay has pushed the automakers and 156,000 U.S. factory employees represented by the United Auto Workers into unfamiliar work routines and extraordinary levels of cooperation among the rival automakers that will have to be sustained for months to come. For automakers, the automakers' COVID response has been as much about instilling new habits as relying on new technology. Workers log their symptoms, or lack of them, into smartphone apps and walk past temperature scanners to get to their work stations. But company and union executives said masks, along with physical distancing, are the key to keeping assembly lines rolling. "The mask is the foundation" of protecting workers on the job, said Johnson. Complaints about masks Autoworkers are accustomed to wearing protective gear such as shatterproof glasses and gloves. Masks that cover the mouth and nose, however, were not standard equipment on auto assembly lines, and were a tough sell at first. "The biggest complaint is wearing a mask," United Auto Workers President Rory Gamble told Reuters. "A lot of our members perform physical tasks. Wearing the mask inhibits breathing." Beyond that, Gamble said, masks and distancing make it harder for workers to have conversations on the job or socialize during breaks. "ThatÂ’s pretty much out the window, and it makes for a longer day," he said. Masks make it harder for co-workers to read each other's expressions — often crucial in the noisy environment of a car plant.

Mixed sales results, but automaker stocks rise on need for cars in Houston

DETROIT — The Big Three Detroit automakers on Friday reported better-than-expected August sales and issued optimistic outlooks for demand as residents of the Houston area replace flood-damaged cars and trucks after Hurricane Harvey, sending their stocks higher. General Motors, Ford and Fiat Chrysler posted mixed August U.S. sales, with GM up 7.5 percent and Ford and Fiat Chrysler down. Japanese automaker Toyota improved sales by nearly 7 percent, while Honda fell 2.4 percent. Still, analysts focused on the potential for Detroit automakers to cut inventories and stabilize used vehicle prices as residents of Houston, the fourth largest city in the United States, are forced to replace tens of thousands, perhaps hundreds of thousands, of vehicles after the devastation from Hurricane Harvey. Mark LaNeve, Ford's U.S. sales chief, told analysts on Friday that following Hurricane Katrina in 2005 "we saw a very dramatic snapback" in demand. That said, Ford sales fell 2.1 percent in August. It sold 209,897 vehicles in the United States, compared with 214,482 a year earlier. Sales were down 1.9 percent in the Ford division and off 5.8 percent at Lincoln. Demand was down for cars, crossovers and SUVs. It was not clear how many vehicles in the Houston area will be scrapped, LaNeve said, saying he had seen estimates ranging from 200,000 to 400,000 to 1 million. Ford's Houston dealers may have lost fewer than 5,000 vehicles in inventory, he said. Ford is the No. 1 automaker in the Houston market, with 18 percent share, according to IHS Markit. The company plans to ship used vehicles to Houston dealers and has "every indication we would have to add some production" of new vehicles to meet demand, LaNeve said. Investor concerns about inventories of unsold vehicles and falling used car prices have weighed on Detroit automakers' shares most of this year. Now, automakers can anticipate a jolt of demand from a big market that is a stronghold for Detroit brand trucks and SUVs. "It's got to be a positive for the industry," LaNeve said. Investors appeared to agree. GM shares rose as much as 3.3 percent to their highest since early March. Ford increased 2.8 percent at $11.34, and Fiat Chrysler's U.S.-traded shares were up 5.2 percent $15.91, hitting their highest in more than five years. GM reported a 7.5 percent increase in U.S. auto sales in August, helped by robust sales of crossovers across its four brands.

China-FCA merger could be a win-win for everyone but politicians

NEW YORK — Fiat Chrysler boss Sergio Marchionne has said the car industry needs to come together, cut costs and stop incinerating capital. So far, his words have mostly fallen on deaf ears among competitors in Europe and North America. But it appears Marchionne has finally found a receptive audience — in China. FCA shares soared Monday after trade publication Automotive News reported the $18 billion Italian-American conglomerate controlled by the Agnelli family rebuffed a takeover from an unidentified carmaker from the Chinese mainland. As ugly as the politics of such a combination may appear at first blush, a transaction could stack up industrially, and perhaps even financially. A Sino-U.S.-European merger would create the first truly global auto group. That could push consolidation to the next level elsewhere. Moreover, China is the world's top market for the SUVs that Jeep effectively invented, so it might benefit FCA financially. A combo would certainly help upgrade the domestic manufacturer; Chinese carmakers have gotten better at making cars, but struggle to build global brands, and they need to develop export markets. Though frivolous overseas shopping excursions by Chinese enterprises are being reined in by Beijing, acquisitions that support the modernization and transformation of strategic industries still receive support, and the government considers the automotive industry to be strategic. A purchase of FCA by Guangzhou Automobile, Great Wall or Dongfeng Motors would probably get the same stamp of approval ChemChina was given for its $43 billion takeover of Syngenta. What's standing in the way? Apart from price (Automotive News said FCA's board deemed the offer insufficient) there's the not-insignificant matter of politics. Even as FCA shares soared, President Donald Trump interrupted his vacation to instruct the U.S. Trade Representative to look into whether to investigate China's trade policies on intellectual property. Seeing storied Detroit brands like Jeep, Chrysler, Ram and Dodge handed off to a Chinese company would provoke howls among Trump's economic-nationalist supporters. It might not play well in Italy, either, to see Alfa Romeo and Maserati answering to Wuhan instead of Turin — though Automotive News said they might be spun off separately. Yet, as Morgan Stanley observes, "cars don't ship across oceans easily," and political considerations increasingly demand local manufacture of valuable products.