CoVid-19 Industry Updates

CoVid-19 Industry Updates (130)

 

The National Automobile Dealers Association (NADA) and the Alliance for Automotive Innovation sent a joint letter to President Donald J. Trump on March 17,” stressing the urgent need to consider vehicle repair, maintenance and sales facilities as essential operations during the nation’s response to the coronavirus.”

The statement read, “A significant number of states have taken emergency action to force the closure of businesses deemed “nonessential,” the groups stated. Given the lack of uniformity in how states have classified dealership sales, service and parts operations, NADA and the Alliance have specifically requested that the federal government ensure that our nation’s motor vehicle fleet remains as safe and operational as possible by considering vehicle repair, maintenance and sales facilities as essential operations when federal, state and local officials impose certain requirements due to the coronavirus outbreak.

“As our nation continues to confront the coronavirus’s challenges, we want to underscore the importance of ensuring that consumers have access to a safe and well-functioning motor vehicle fleet,” stated NADA President and CEO Peter Welch and Alliance for Automotive Innovation President and CEO John Bozzella. “Motor vehicles, both new and old, are critical to ensure that the public can get food and other necessities of life, as well as to continue to interact with one another in a manner consistent with public health officials’ recommendations.”

“Given the importance of safe transportation in addressing the coronavirus outbreak, we have an obligation to ensure that motor vehicles remain safe and are properly maintained,” NADA and the Alliance continued. “To that end, it is vital that vehicle repair, maintenance and sales facilities be considered essential operations when federal, state and local officials impose certain requirements due to the coronavirus outbreak.”

 

KPA a software and consulting company is offering free CoVid-19 resource training for the workplace. KPA has over 30 years of experience in the areas of environment, health, and safety and workforce compliance. The company has free webinars and training courses to help businesses address coVid-19 in the workplace and help keep their employees and customers safe.

 They are offering five free training courses:

  • CoVid-19 Awareness
  • Health and Wellness
  • Hazard Communication
  • House Keeping
  • Basic First Aid Awareness

They cover How Employers Can Manage Coronavirus Anxiety and Safety on their blog. A topic weighing on the minds of many dealerships and shops that do repair work.

As well, they have developed a CoVid-19 Content Package. The content pack includes:

  • A CoVid-19 Workplace Prevention and Hygiene Training Packet
  • Two Checklists covering facility and personal hygiene and preparedness.

 KPA says it works to create “safer work environments for employees.”

Ally Financial launched a comprehensive set of financial support initiatives to help the people and communities it serves to withstand the extraordinary pressures triggered by the COVID-19 health crisis and be better positioned to recover quickly from its effects.

Ally is addressing auto dealers and auto buyers, in addition to home buyers and other consumers.

In recognition that auto dealers are fundamental economic engines for their local economies, Ally is working closely with its network of approximately 18,000 dealers to navigate changing market dynamics, assess their specific needs and develop individualized solutions. This includes offering consumer incentives that help dealer customers, as well as specific solutions to help dealers with their loan funding needs. Ally also is making its dedicated credit and funding staff available to dealers as needed to provide fast and efficient funding options that help them maximize used and new vehicle sales.

Existing auto customers will be allowed to defer payment for up to 120 days. No late fees will be charged; finance charges will accrue. New auto customers will have the option to defer their first payment for 90 days.

The National Association of Manufacturers is calling for additional aggressive actions from the federal government to help the industry respond to COVID-19 and future public health emergencies. 

Among the additional actions in the NAM’s updated and expanded “COVID-19 Policy Action Plan Recommendations,” the NAM is requesting the federal government create the “Manufacturing Resiliency Fund,” which would include $1.4 trillion in loans to provide desperately needed liquidity to manufacturers and small businesses, protecting the nearly 13 million men and women working within the industry and ensuring their financial security. Manufacturers are also calling on the government to adopt a federal designation that deems the manufacturing supply chain “essential” to help mitigate any interruptions in providing the supplies that are critical to the health and safety of America.

Prime Motor Group announced they will immediately begin “Prime Pickup”, a vehicle pickup and delivery service.  Cars can be delivered to customers’ locations for test drives and, of course, newly purchased vehicles can be dropped off at a customer’s front door.  In addition, if autos are in need of repair or maintenance, Prime employees will pick them up and drop them off when service is complete (mileage restrictions may apply).

Prime has already instituted precautions in the wake of the COVID-19 outbreak. These range from employee health and safety protocols to extra sanitary measures in all areas of its dealerships. Cars that are being delivered or serviced will be sanitized as much as possible.  Particular attention will be paid to “high touch” areas such as steering wheels, door handles, gear shifts, etc.

GM, Ford, and Tesla said this week that they are “exploring” ways of ramping up production of ventilators amid fears the devices might become scarce in the U.S. in the COVID-19 pandemic.

Late Wednesday, Tesla's CEO Elon Musk tweeted the Silicon Valley automaker “will make ventilators if there is a shortage.”

The life-saving ventilators are easy to produce but it will take time to retool factories into production. Nor is it clear how long it would take for the car companies to retool themselves for producing medical supplies, but Ford and GM have been in discussions with the White House about the possibility. The UK has also asked automakers and other manufacturers to help meet the need for essential medical equipment.

The federal government has the authority to compel manufacturers to produce such equipment under the Defense Production Act reinstated by President Trump on Wednesday. "We'll be invoking the Defense Production Act, just in case we need it," Trump told reporters at a White House news conference. "It can do good things if we need it."

Honda released a statement on Wednesday morning saying it’s closing all of its automotive production plants in North America for six days due to an “anticipated” drop in demand. The shut-sown will reduce vehicle output by about 40,000.

Honda says it will pay all 27,000 workers across the closed facilities during the shutdown.

After an autoworker employed at Fiat-Chrysler's Sterling Heights Assembly plant in MI tested positive for coronavirus, FCA has closed the plant for workers safety.

Workers at an FCA plant walked off the job on Tuesday, March 17th over safety concerns pertaining to CoVid-19.  On Sunday the UAW's president released a statement that the union had requested that FCA, Ford, and GM close the plants for a 2 week period starting immediately. Detroit's big three automakers have chosen to not shutter their plants.

Late Tuesday night the UAW and the automakers agreed to a partial shut-down, in a statement the UAW said the agreement includes  "New measures that will increase adherence to CDC recommendations on social distancing in the workplace."  The measures include “Rotating partial shutdown of facilities, extensive deep cleaning of facilities and between shifts, extended periods between shifts, and extensive plans to avoid member contact."

The agreement came after UAW President Rory Gamble went public over his frustration with the big Three. Gamble had warned he would take unilateral action if the automakers did not do more to secure hourly workers on factory floors.

The agreement allows the automakers to keep building profitable models such as Ford’s F-150 pickup, Fiat Chrysler’s Jeep Wrangler and GM’s Cadillac Escalade at a reduced pace.

FCA released the following statement Tuesday evening, "Following several days of proactive discussions with our UAW partners focused on providing a safe environment for our employees, we have agreed that in addition to our extensive current protocols to protect our employees, FCA will implement a series of shift pattern and production changes across our manufacturing plants in the United States. These changes, which include rotating shifts to allow for greater separation of employees and further enhancing our new sanitation protocols, are focused on providing a safe environment and peace of mind to our employees at their place of work."

Gm confirmed on Tuesday that two of its salaried employees have tested positive for the virus. GM, FCA, GM all have committed to sanitizing working conditions more. The automakers have allowed salaried employees to work from home to reduce their risks of exposure.

With things changing at a dizzying speed, the big Three may end up shuttering the plants any day.

 

 

 

Leaders from the National Auto Auction Association, Manheim, ADESA and several independent auctions, held a conference call on March 16 to discuss the continuing challenges of the COVID-19 (coronavirus) pandemic.

Auto auctions who move ahead with physical sales should take certain precautions in light of ever-changing guidelines over COVID-19 (coronavirus), according the NAAA’s general counsel.

Frank Hackett, CEO of NAAA, said auctions have asked NAAA to help facilitate weekly discussions about issues related to the coronavirus and restrictions placed on businesses.

He said the challenge for auctions to knowing what restrictions apply to them or how to comply.

“So, we’ve been interpreting a lot of the governors’ directives and using our counsel to do that,” Hackett said. “We have to look at that and figure what’s the best way to respond to that.”

NAAA General Counsel Thomas Lynch III released a letter about the call, as well as news that came after the call.

“The guidelines on this issue have been changing from day-to-day and hour-to-hour and the Center for Disease Control issued new guidelines on Sunday (March 15) recommending that gatherings of 50 or more people should be postponed or canceled for the next eight weeks or so to prevent the spread of the (coronavirus),” Lynch wrote.

He added that guidelines have become more restrictive over time, including restrictions for some businesses to cease operations.

Maryland Gov. Larry Hogan’s announcement shortly after the call indicated that authorities ranging from local and state police to the National Guard would be enforcing his executive order prohibiting gatherings of more than 50 people.

Other states have issued similar restrictions.

Hackett explained that auctions don’t always fall into certain categories that are part of a state’s restrictions.

For example, an auction may have a restaurant inside its facility that falls under a restriction, even if the auction itself doesn’t.

Lynch offered recommendations for physical sales.

“… if you do proceed with the sale, there are certain precautions you should take that should include identification of those areas in your facility where you may have a congregation of people and the risk may be the greatest of potential exposure,” he wrote. “Those locations would include your lobby or areas where badges are issued, lunchrooms, bathrooms and even in the lanes, if you are conducting actual auction sales and not virtual sales. You may want to consider having extra sanitation and wash stations, more toilet facilities, and a means of identifying where the greatest risks may exist in your business, whether it is with customers, vendors, employees or independent contractors.”

Lynch also advised auctions to make sure they protect themselves legally in the wake of these restrictions.

“With this as the background, we recommend to our member auctions the following: if you are considering conducting a sale in the upcoming weeks at which more than 50 people maybe in' attendance, you would be well-advised to consult with counsel and/or your state and local regulatory officials to ensure that you understand the current state of directives that are applicable to your location,” he wrote.

NAAA also encourages auction leaders to make sure to maintain a diary or journal to record or document conversations with local and state officials when they speak with them. That should include the day, time and name of the person the auction official contacted, as well as the auction staffer who spoke with the official and what was said.

Hackett said NAAA will continue to provide updates on coronavirus and offer information for auctions.

 

Many of the country's largest auto manufacturers have announced this week that buyers of new vehicles that have been affected by the CoVId-19 shutdown will have options. Numerous ideas are being floated from delaying the first payment, rescheduling payments, to zero-interest loans. U.S automakers are looking to boost new auto sales as China reels from a 79% drop in domestic auto sales caused by their CoVid-19 shut-down.

  • On Friday Hyundai Motor Co announced it is deferring payments for 90 days select new models and will provide up to six months' relief on payments for customers that are laid-off due to CoVid-19.
  • On Monday Ford Motor Company followed suit announcing it is offering the option to customers to delay their first payment by 80 days. Details are on Ford's Credit Support website.
  • General Motors made a statement that they are working with customers on a case by case basis and will also be providing payment relief to customers affected by the CoVid-19 shut-down.
  • General Motors is going to offer zero-interest loans for up to 84 months, in a deal available to customers in top credit tiers.
  • Nissan and Toyota also stated they will be providing relief options to customers affected by the virus, including deferred lease payments and extensions on loan payments.

There is another group of car owners that will need payment relief in some capacity in the coming months. 26 percent of all auto loans issued in 2016 were high-interest subprime loans taken out by low income and poor credit score buyers. Seven million Americans are at least 90 days late on their auto loan payments, according to a report by the Federal Reserve Bank of New York. These 7 million loans account for 4.5 percent of all auto loans in the U.S. Borrowers with the lowest credit scores have seen the fastest acceleration on auto-loan defaults.

For America's low-income workers having a car is often a necessity for keeping a job and the shut-down of restaurants and other service industry businesses could exacerbate an already growing issue with sub-prime auto loans.