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Tuesday, 05 May 2020 22:27

FCA Wants to Restart Plants Week of May 18, After Losing $1.84B in Q1

Written by Breana Noble, The Detroit News

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Fiat Chrysler Automobiles NV expects to begin restarting most plants in North America the week of May 18 after reporting a net loss of $1.84 billion in the first three months of the year.

The COVID-19 pandemic temporarily shut down all of the Italian American automaker's plants from China to South America, contributing to a 16% year-over-year decrease in revenue to $22.3 billion. Adjusted pre-tax earnings were $56.3 million, down 95%.

 

The results illustrate the crippling nature of the outbreak on automakers' bottom lines, despite the production suspension in North America lasting less than two weeks of the first quarter.

 

"These are unprecedented times, and I think we have learned a huge amount already," CEO Mike Manley said May 5 on a conference call. "When I say I want to emerge from this stronger than when we came into it, to some extent you may think that is a flippant remark, but I think if you don't try to learn from these situations because you are forced into experimentation to a large extent."

 

North American plants will ramp-up progressively starting the week of May 18 except for Belvidere Assembly in Illinois, which will begin by June 1.

 

Additional safety procedures may require a reduction in jobs per hour, the company said, and it will align production with consumer demand. Electrified, high-margin and low-inventory vehicles will take precedence.

 

"This plan has been developed following continuous discussions with the UAW and the governors of the states with which we operate, particularly Gov. Gretchen Whitmer from Michigan," Manley said. "This is a reflection of the progress that has been made in our home state and the complementary safety measure we are adopting in our plants."

 

Neither General Motors Co. nor Ford Motor Co. publicly have committed to a restart date, though discussions with the state of Michigan appeared to be coalescing around May 18, according to a source familiar with the situation that was first reported by The Wall Street Journal.

 

But that depends on complex coordination by automakers with suppliers, conflicting stay-at-home policies in various states and the political and public health agendas of at least three national governments: Mexico, Canada and the U.S.

 

Fiat Chrysler did restart one of its plants and supporting components operations last week in Italy. North American executives expect to mirror here the rollout of new health and safety protocols from there and in China.


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