CoVid-19 Industry Updates

CoVid-19 Industry Updates (169)

Kia Motors announced that production of face shields has begun at its manufacturing plant in West Point, Ga. Initial donations of medical use face shields assembled at Kia Motors Manufacturing Georgia (KMMG) will be made in Georgia, Alabama, New York and California.

With a monthly capacity of 200,000 units, the face shields are being assembled by paid volunteers from KMMG, which has implemented a series of safety measures to protect team members, including: conducting temperature scans, providing face masks and gloves, and staggering workstations. Materials are being sourced from vendors such as 3-Dimensional Services Group, a Michigan-based rapid response manufacturer supporting prototype and low volume production applications.

On April 16th the first Ventec Ventilators were shipped out of GM’s plant in Kokomo, Indiana and the workers that built them wrote notes and signed the boxes with messages of hope and support for frontline hospital workers and people suffering from COVID-19.

GM began working with Ventec, a small Seattle-based producer of the ventilators, in early March and mobilized more than 1,000 employees and nearly 100 auto suppliers to start making the critical machines in the fight against COVID-19. The goal is to eventually make 10,000 ventilators per month, according to GM and Ventec, but the companies didn’t specify how long it would take to reach that output. GM also plans to produce masks.

With 960,000 US COVID-19 patients potentially needing ventilators, President Trump ordered General Motors on March 27th through a 1950’s wartime act⁠ to make ventilators for U.S. hospitals treating COVID-19 patients. GM said it began work on the life-saving machines on March 16th. 

Mazda North American Operations (MNAO) announced it will provide free standard oil changes and enhanced cleaning services for U.S. healthcare workers at participating dealers nationwide. This program, which began on April 16, is not limited to Mazda owners and is available for most makes and models from other manufacturers. The Essential Car Care program, developed in partnership with the Mazda dealer network, will invest a minimum of $5 million as part of the initiative.

“Supporting the communities where we live and work is rooted deeply in Mazda’s 100-year history. We are honored to give back to those dedicated to saving lives during this pandemic,” MNAO President Jeff Guyton said.”

 

Dealer XT, an auto dealer compliance firm, has created a petition to urge California Gov. Gavin Newsom to declare auto dealers as essential businesses.

In the online petition, Dealer XT asked Newsom to “expressly add” auto dealerships to the list of the essential businesses. It said the state’s position only lists auto repair and supply businesses as essential and is unclear and conflicts with other local government lists.

The petition states, “Automobile dealers are currently experiencing confusion about whether they can remain open as an ‘essential business’ as it relates to automobile sales. As an example, the Counties of Sacramento and Merced have specifically listed automobile dealer sales as ‘Essential Businesses’ while other counties have not. Some counties have now amended their orders to allow cars sales with certain restrictions.”

The petition shares stories of healthcare workers who, for various reason, were left without transportation because they could not buy a car. It also explains that most dealerships have small staffs and are able to social distance and protect customers. The petition adds, “Over the past few weeks, simple solutions have successfully been applied by many essential businesses across the state to provide a safe environment. Why not allow car dealerships to do the same?”

Total industrial production fell 5.4 percent in March, as the COVID-19 pandemic led many factories to suspend operations late in the month.

Manufacturing output fell 6.3 percent; most major industries posted decreases, with the largest decline registered by motor vehicles and parts. Total industrial production for manufacturing saw its largest declines since January 1946 and February 1946, respectively. The indexes for utilities and mining declined 3.9 percent and 2.0 percent, respectively. At 103.7 percent of its 2012 average, the level of total industrial production in March was 5.5 percent lower than a year earlier. Capacity utilization for the industrial sector decreased 4.3 percentage points to 72.7 percent in March, a rate that is 7.1 percentage points below its long-run (1972–2019) average.

The weakness in consumer durables was led by a drop of 27.2 percent in automotive products, while the decline for consumer energy products reflected decreases in both fuels and utilities. The production of business equipment decreased 8.6 percent, held down by a drop of 22.8 percent in transit equipment that reflected cutbacks in the output of both motor vehicles and civilian aircraft.

Manufacturing output dropped 6.3 percent in March and at an annual rate of 7.1 percent in the first quarter. In March, the index for durable manufacturing fell 9.1 percent; the most sizable decline among its components was in motor vehicles and parts, where output fell 28.0 percent.

Hyundai Motor America announced the expansion of its support for COVID-19 drive-thru testing to 22 hospitals nationwide with $4 million in grants through its Hyundai Hope On Wheels program. These grants are designed to combat the coronavirus by providing increased access to testing throughout the nation.

The company also announced an in-kind donation of 65,000 COVID-19 RT-PCR tests developed by Seegene, a South Korea-based global leader in multiplex molecular diagnostics.

“As a global automaker, we continue to monitor the COVID-19 situation and its potential harm to the U.S. and beyond,” said Jose Muñoz, president and CEO of Hyundai Motor North America. “A best practice that was crucial in South Korea’s handling of the coronavirus was drive-thru testing. This approach protects the healthcare workers and patients from the potential spread of the virus, while diagnosing those most in need.”

Hyundai and its over 825 dealers have also provided support to local institutions with financial assistance, food donations, face-mask headband production and loaned vehicles.

Related finance companies are not being approved for loans under the Paycheck Protection Program and that’s a mistake, according to the National Independent Automobile Dealers Association.

NIADA, through its CEO Steve Jordan, made its case this week by sending letters to leaders of the U.S. Congress, the Small Business Administration and the Senate Small Business Committee.

“As NIADA members begin to apply for PPP loans, we find that the dealership entities are being approved with little concern. However, RFCs are routinely denied with lenders stating current SBA guidance prohibits finance companies from receiving a PPP loan,” Jordan wrote.

Citing the specific sections of the CARES Act, the NIADA contends that despite Congress’ “clear intent,” the act seems to limit and exclude RFCs from participating in the program.

Jordan wrote,  “NIADA believes this limitation clearly conflicts with the intent, if not the express language of the statute.”

NIADA provides proposed language to allow the RFCs to participate in PPP.

“This change will permit our BHPH (buy-here, pay-here members’) RFCs to get much needed help to keep America’s credit-challenged essential personnel driving,” he wrote.

Jordan also discussed the important role that RFCs and buy-here, pay-here dealers play in helping unbankable customers get financed for basic transportation.

 

Michigan Gov. Gretchen Whitmer changed the conditions of her original stay-at-home order to include remote and electronic auto sales as essential businesses.

The April 9 revision of her previous order includes:

“Workers at motor vehicle dealerships who are necessary to facilitate remote and electronic sales or leases, or to deliver motor vehicles to customers, provided that showrooms remain closed to in-person traffic.”

Whitmer allowed car sales even as she tightened up other restrictions, including prohibiting travel between residences, meaning a resident may not visit another resident within the state.

DealerSocket Inc. is launching a free, web-based application called the Dealership Loan Navigator to help dealerships navigate the complex process of applying for financial assistance through the CARES Act. Created in partnership with DealerSocket’s sister company Quick Base, the Dealership Loan Navigator guides dealers through a series of questions and then determines eligibility for financial assistance for various CARES Act loans, including the Paycheck Protection Program (PPP). The Navigator then populates the application into a PDF form, which dealers can download and send to their banks to apply for financial assistance.

 

“Dealers across the automotive retail industry are trying to understand the complex process of applying for financial assistance as part of the CARES Act. We want to help simplify the process through technology,” said Sejal Pietrzak, CEO of DealerSocket.

 

DealerSocket also announced it was slashing its April bills by up to 50 percent for their software. It is offering several products for free for a period of time, including its digital retailing software PrecisePrice, its Test Drive Delivery Scheduler in DealerFire, SocketCredit in its CRM, and the newly launched Absolute Sourcing and New Car Pricing modules in its Inventory+ product.

 

An official from the Small Business Administration confirmed auto auctions are eligible for SBA loans under the CARES Act relief package signed into law this month.

National Auto Auction Association President Laura Taylor recently hosted a teleconference with SBA official R. Gregg White, in conjunction with the Independent Auction Group and she moderated a Q&A with White, the district director in Taylor’s home state of South Carolina.

White told the group that the $2 trillion relief package contains $377 billion in aid for small businesses like auctions.

Auto auctions can apply for the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL).

PPP provides loans that will be fully forgiven when used for at least 75 percent of payroll costs, as well as interest on mortgages, rent, and utilities. EIDL advances will provide up to $10,000 of economic relief for working capital needs to businesses that are currently experiencing temporary loss of revenue and will not have to be repaid.

Other aid programs that are available are the SBA Express Bridge Loans, and the SBA Debt Relief offers a financial reprieve to small businesses during the pandemic.