Major U.S. auto suppliers informed Michigan Governor Gretchen Whitmer they are ready to resume production and raised alarm about new delays to restarting operations.
Following the spread of the coronavirus, most auto suppliers stopped operations in late March as automakers shut down their factories. Now uncertainty regarding when Michigan will permit the resumption of operations is causing delays across the U.S. auto industry.
The Motor & Equipment Manufacturers Association and Original Equipment Suppliers Association informed Whitmer in a letter late on Thursday that delays in re-opening facilities would boost “liquidity risk for suppliers and jeopardize long-term capital investment and employment for Michigan”.
The organization has asked Whitmer “to provide clear authority for automotive suppliers to restart their operations in Michigan at least five days before OEM production begins”.
Auto suppliers in Michigan hire about 125,000 people and are normally paid 45 days after production. Automotive industry executives state this indicates some smaller suppliers are in danger of running out of money in the coming weeks.
Previously this week, both Volkswagen AG and Toyota Motor pushed back the planned restart of U.S. auto production and mentioned auto supplier issues as a factor.
Whitmer’s office did not immediately discussed but she has held regular talks with the United Auto Workers (UAW) union and top executives of Ford, General Motors and Fiat Chrysler, officials say.
U.S. automakers hope to start production as early as May 18, which would mean auto suppliers would require the green light to restart operations on May 11. The letter said the “Michigan supplier community is ready to re-start and we are committed to working with your Administration to build public confidence in our ability to safely reopen our places of business.”
The UAW stated previous week that it was really soon and too risky to restart auto plants in early May.
The letter noted the dependence of American auto production on Michigan-based suppliers.
The letter noted that the auto manufacturers across the country and the world depend on parts and components manufactured in Michigan. Due to this integration, Michigan suppliers are an important link to the industry’s economic recovery.
It consisted a list of chief executives of auto suppliers and senior executives from the North American-units of foreign companies supporting the requests including Continental AG, BorgWarner, American Axle, Lear Corp, Magna International, Denso Corp, Robert Bosch, Nexteer Automotive and LG Electronics USA.
About 1,130,494 people in the US have been confirmed as being infected with the coronavirus. The virus has killed 65,605 people in the country.
