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Auto Industry Expects A Two-Year Recovery

September 4, 2020, 12:00 am

In early September, representatives from some of the biggest manufacturers in the United States met with lawmakers to paint a bleak picture. After months of uncertainty, supply chain issues, and the effects of a pandemic ground Detroit and factories across the country to a halt. 

Initially, the automotive industry was worried about the effects of the coronavirus on its supply chain. Even factories in the US rely heavily on raw materials and small parts from not just China but around the globe, and it was January and February when those issues first came to head. Soon, however, lockdowns meant closed factories and production shortages. Some, including GM, quickly transitioned a few locations to manufacturing ventilators, but on the whole, assembly lines were silent. 

Demand, of course, plummeted as well. With millions out of work and only a single stimulus check making it into the hands of Americans, any cars sales that did happen were largely on used or certified used cars and trucks. 

The situation is frustrating for suppliers and brands alike, who spent millions to buoy their factories and to keep their employees safe. One expert is forecasting a drop from 17 million anticipated sales to just 14 million, and with the risk of more lockdown through fall and winter if the virus resurfaces in the Midwest, the industry may be hanging in the balance. 

Of course, work stoppages may not necessarily come from the state. Manufacturers may also need to shut their own factories down if there are cases, which is why companies like Ford, GM, and Chrysler Fiat have spent millions on personal protective equipment for their employees. They’ve also continued to practice strict guidelines on how to handle possible exposure. The UAW also helped to implement a robust testing system for asymptomatic employees to help monitor the workplace. 

Barring any more major challenges, the auto industry is looking at a long and winding recovery which could span two years or more. How it affects the wider economies of Michigan, the Midwest, and the world, will be difficult to forecast, but will certainly be sizable..

 

Posted by Garfield Auto at 12:00 am
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