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How COVID-19 Is Changing the Automotive Supply Chain

Just before Secretary of Health and Human Services Alex Azar declared a COVID-19 public health emergency in January 2020, activity at U.S. auto plants began to slow.

Then, within days of President Donald Trump’s March 13 declaration of a COVID-19 national emergency, the Big Three automakers — Ford, GM and Fiat Chrysler — suspended vehicle assembly operations in the United States, Canada and Mexico. Honda and Nissan also temporarily suspended production, as did Toyota. By early April, “production of cars stopped completely,” the NPR report said.

Shifting Gears to Support the Fight Against COVID-19

Some automakers pivoted their vehicle plants, auto workers and supply chains to produce personal protective equipment (PPE) and other vital health care equipment.

GM produced ventilators, medical face masks, face shields and N95 respirators, the company reported in news releases.

Ford also converted some facilities, personnel and suppliers to produce PPE and healthcare devices. “Inspired by the go-fast effort in 1970 to help NASA’s disaster-stricken Apollo 13 astronauts, Ford’s Project Apollo team has undertaken a variety of efforts in the fight against COVID-19.”

The company worked with 3M to design, test and gain approval for a powered air-purifying respirator (PAPR). Other products produced by Ford, its suppliers and collaborators included “more than 12 million face shields, ventilators in collaboration with GE Healthcare, medical masks for its workforce, and washable gowns for hospital and medical workers.”

Restarting the Industry in a ‘New Normal’ Environment

The Big Three automakers began a phased restart of their assembly plants the week of May 18, CNN reported. The report said the companies would clean the facilities during and between shifts and screen employees as they enter the plants. Workers will wear face masks, shields and other PPE and will practice social distancing.

And, according to the NPR report, “plants are working overtime to catch up with that pent-up demand” created by the sell-down of inventory during the manufacturing suspension. The report said that “Wards Intelligence, an automotive and analytics firm, found that vehicle production in North America has returned nearly to pre-virus levels.”

Pandemic Revealed Challenges in the Automotive Supply Chain

While vehicle production has apparently mostly recovered from the shutdown, the pandemic has revealed some challenges facing the industry’s supply chain.

  • In November 2020, GM cancelled production shifts at its SUV plant in Arlington, Texas, due to a parts shortage arising from a Mexico supply issue.
  • Unprepared for the drastic downturn in the economy, auto suppliers were especially hard hit, with bankruptcy filing often the only option. Some of the bankrupt suppliers fighting to survive are well-known and had been dominant in the industry.

Lessons Learned From the Pandemic

A Supply & Demand Chain Executive article names a few ways to cushion against supply chain risks. Using digital supply networks and business process automation, having backup and contingency plans for supply chain disruptions, and optimizing the global distribution footprint are among them.

Learn more about UNCW’s online MBA program with a Specialization in Supply Chain Management.


CNN: Automakers have another COVID-19 problem: Suppliers

CNN: GM, Ford and Other Automakers to Halt Production in the US

Dallas Business Journal: Update: Toyota Suspending Production for Nearly 2 Weeks Across North American Plants

Ford: Ford And 3M Now Shipping Powered Air-Purifying Respirators to Health Care Workers; New Jersey Orders 500,000 Gowns

GM: GM Develops and Shares New Workplace Safety Technology

GM: General Motors and Ventec Life Systems Complete Delivery of 30,000 V+Pro Critical Care Ventilators

NPR: As Auto Industry Roars Back, Worker Shortages Throw Up Roadblocks

Supply & Demand Chain Executive: Ways to Mitigate New Global Supply Chain Risks

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