The coronavirus has taken a heavy toll on automotive and tire plants in Europe and the Americas.
The World Health Organization said on 13 March that Europe has become the epicenter of the pandemic, with the region reporting more cases and deaths than the rest of the world outside of China. The number of reported cases in China has subsided, and workers are slowly returning to work and a more normal life.
To start the week of 16 March, European car and tire markets appeared to be confronting the biggest challenges. But by mid-week, US plants began temporarily idling plants. The closures in both regions were due to a combination of virus prevention, supply chain disruption and poor consumer demand.
Three of Europe’s largest carmakers are shutting plants temporarily. Fiat Chrysler (FCA), the PSA Group and Renault closed 35 plants across Europe this week. FCA shut six facilities in Italy, along with plants in Serbia and Poland, until 27 March, citing an interruption in market demand. PSA followed suit, idling 15 sites in seven European countries.
Renault said it would indefinitely halt production at 12 facilities in France. Ford shut its facility in Valencia, Spain, on 15 March after workers there tested positive for the coronavirus.
Other European manufacturers are also acting. Volkswagen is preparing for interruption to operations across Europe, with many closures already announced. Toyota has suspended its European operations until the end of March. BMW shuttered its operations in Europe and South Africa.
Honda was among the first to close in North America, saying on 18 March that all its plants in the region had shut for six days due to an anticipated drop in demand. FCA closed a plant in Michigan after confirmed cases of coronavirus surfaced at the location.
The United Auto Workers union and major automotive manufacturers agreed on 17 March to enact partial shutdowns and heighten health and safety measures at US factories. The next day, the “big three” automotive giants – Ford, General Motors, and Fiat Chrysler – announced full plant closures through March.
Automotive manufacturers have been consolidating operations for years in response to a transforming industry. Shuttering plants due to coronavirus fears could accelerate the trend.
General Motors already shut a plant in Australia, sold its operations in Europe, Russia and Africa, and closed four plants in the US and one in Canada during 2019. Honda said last year that it will close its Swindon, UK, operations by 2021. Ford is set to reduce its European manufacturing footprint to 18 facilities by the end of 2020 from 24 locations when 2019 began.
Tire manufacturers have also felt the virus’ sting. Goodyear said on 18 March that it will suspend all European tire manufacturing through at least 3 April. The action, which came in response to a sudden drop in market demand, will shutter plants in France, Germany, Luxembourg, the Netherlands, Slovenia and Poland. The company is also halting operations in the Americas.
Italian tire maker Pirelli slowed its Italian production lines but has yet to fully close its plants. Pirelli later said it would close its Rome, Georgia, facility the week of 29 March for sanitization.
On 19 March Bridgestone said it was idling production in North and South America effective 21 March up to on or before 12 April. Michelin the week of 16 March disclosed plans to shut down operations in Europe for at least one week. By end of day 20 March, Michelin said it would commence a partial shutdown of operations in the US and Canada for at least two weeks.
Like the auto sector, tire suppliers were cutting back well before the pandemic. At least six Continental plants were set to close in 2018-19. Cooper Standard Automotive will close two plants in 2020, adding to the 10 already scheduled for closure around the globe.
Pirelli plans to consolidate operations in Brazil through closures while moving some European operations to Russia. Michelin plans to shutter its Roche-sur-Yon facility in France the end of 2020, citing the transformation of the premium truck tire market in Europe and overseas.
The announcement came a month after Michelin said it would shut a plant in Hallstadt, Germany, by early 2021, and a year after it said it will idle its Dundee, Scotland, plant by mid-2020. Michelin cited declining demand and competition from Asia for its closures.