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Tuesday, 12 May 2020 17:12

'Phase 3': MI Manufacturing Begins Methodical Restart

Written by Breana Noble and Jordyn Grzelewski, The Detroit News
Technician Randy Ford works in the final measurement check area on a transfer case for a Ford vehicle May 11 at BorgWarner in Auburn Hills, MI.  Technician Randy Ford works in the final measurement check area on a transfer case for a Ford vehicle May 11 at BorgWarner in Auburn Hills, MI.  Daniel Mears, The Detroit News


“We don’t want to jump in right away with everybody back and then things go haywire," said Trent DeSenglau, United Auto Workers Local 155 chairman for Detroit-based American Axle & Manufacturing Holdings Inc.'s Fraser plant making transmission components, shafts, gears and other metal parts for the auto industry. "They are doing a measured approach, which is what we asked them to do."


American Axle recalled at the Macomb County plant one shift of three for the week starting at 6:45 a.m. May 11, DeSenglau said. A tent outside had workers drive through to get their temperatures checked and pick up masks and other protective equipment before entering the facility. The new measures inside the plant, including hand sanitizing stations, helped ease some of the workers' concerns.


American Axle declined to comment. But during its earnings call May 8, the company said it expects to resume production in phases starting in mid-May and going into June.


Other companies, including Nexteer Automotive in Saginaw and Ontario-based Magna International Inc., also resumed manufacturing May 11. Others, such as seating manufacturer Southfield-based Lear Corp., are holding off until next week.


Ramp up for auto suppliers even could extend into July, said Dan Kennedy, executive director of sales for Illinois-based Flex-N-Gate, which makes metals, plastics and other parts in Detroit, Livonia, Grand Rapids and elsewhere. The timing will align with its automaker customers.


"As they ramp up," Kennedy said, "we will ramp up."


Engineers at BorgWarner Inc.'s propulsion technical center in Auburn Hills are anticipating long workdays ahead to catch up orders from global clients and sort out supply bottlenecks.


"We're having issues with [our] suppliers that are still closed, so that's going to lead to some supply-chain chokepoints," said Matt Belt, a senior validation engineer with BorgWarner who returned May 11 with about 50 employees to the technical center.


The components and parts supplier is gradually phasing its workforce and production as it navigates differing government directives across its U.S. footprint. Plants in Livonia and Cadillac began a staggered restart May 11. In the technical center, small crews were building parts prototypes and validating transfer cases from a plant in South Carolina that recently resumed after a tornado damaged the facility.


Liquidity is posing a challenge to suppliers as pre-shutdown payments dry up and they purchase materials they need to restart, said Steve Hilfinger, who represents automotive suppliers at law firm Foley & Lardner's Detroit office. Some suppliers are not paid until 60 days after delivering an order.


"I think as suppliers are being asked to ramp back up and purchase raw materials and supplies," Hilfinger said, "this is going to become a very pressing issue in very short order."

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