Tier 1 suppliers gradually halting operations

Worldwide
Published:  23 March, 2020

After the announcement that some OEMs were temporarily suspending production due to the coronavirus, automotive seating and components suppliers such as Faurecia and Lear have also taken measures to halt some operations.

The coronavirus pandemic has led to a halt in the automotive sector in some European countries, the U.S. and Asia. Renault, Nissan, Groupe PSA, Toyota, BMW, GM, Ford and Ferrari are some of the OEMs having temporarily suspended production. Tier 1 suppliers Lear and Faurecia are also following suit, as dealerships remain empty of clients. Reportedly, new car sales in China dropped 85% in February during confinement. But the sharp drop in demand is not the only reason these companies have decided to close down. Employee absenteeism due to the virus is another factor the manufacturers have had to take into consideration, sometimes because people have to keep children at home or for fear of contagion. Furthermore, the shortage of protection masks and hand sanitisers means some companies have been unable to assure total security to its employees.

Faurecia is said to be temporarily closing down most of its factories in Europe, while Lear’s closure in the U.S. is related to some employees having been tested positive for COVID-19, leading to Ford halting operations in its Chicago plant due to a shortage of supplies. Adient, announced on March 20 that it is suspending its FY2020 outlook due to the unprecedented global economic uncertainty caused by the COVID-19 pandemic. “The coronavirus pandemic is dramatically affecting all industries around the world, including the automotive industry where vehicle production has been temporarily suspended across Europe and North America. Adient is taking aggressive steps to safeguard the health of our employees as well as protect our business”, said Doug Del Grosso, President and CEO, Adient.