April 29, 2020 / 6:26 PM / a month ago

VW, Toyota delay U.S. production restart, citing supplier concerns

(Reuters) - Volkswagen AG (VOWG_p.DE) and Toyota Motor Corp (7203.T) said on Wednesday they will delay restarting U.S. production amid the coronavirus pandemic and concerns about the automotive supply network.

FILE PHOTO: A general view of the Volkswagen construction plant which reopened after closing down last month due to the coronavirus disease (COVID-19) outbreak in Bratislava, Slovakia April 28, 2020. REUTERS/Radovan Stoklasa

VW said it is indefinitely delaying the resumption of production at its Tennessee assembly plant that had been set to restart on May 3.

Toyota said it will delay the resumption of North American manufacturing operations to the week of May 11 from the week of May 4 after an “extensive review with our supplier and logistics network.”

The German automaker in a statement said that before it sets a new date it “will weigh the readiness of the supplier base, as well as market demand and the status of the COVID-19 outbreak.” VW’s U.S. production has been suspended since March 21.

Automakers had hoped to begin restarting production in early May but face hurdles including orders in key states like Michigan that limit non-essential business operations.

Germany’s BMW AG (BMWG.DE) said Wednesday it plans to restart work at its Spartanburg, South Carolina, plant on Monday at about half the factory’s capacity and then “carefully ramp up production.”

Detroit’s Big Three automakers have been in regular talks with the United Auto Workers (UAW) union on the conditions needed to resume production, but the companies not appear likely to resume U.S. production before May 18 at the earliest.

UAW spokesman Brian Rothenberg said the union continues to “have discussions about key health and safety issues and science that need to be in place for a restart.”

No. 2 U.S. automaker Ford Motor Co (F.N) said on Wednesday it still had no date to restart work at its North American plants, but scheduled a Thursday conference call to explain how it will protect its workers.

Ohio on Monday outlined its plan, which included reopening the construction and manufacturing sectors on May 4.

Michigan Governor Gretchen Whitmer has not set a reopening date for manufacturing yet, and the UAW, which represents many hourly auto workers in Michigan and other states, has said early May is “too soon and too risky” to reopen.

On Wednesday, Whitmer said she is allowing the state’s construction sector to reopen on May 7, and emphasized worker safety was paramount.

“Workplace safety cannot be an afterthought,” she said at a press conference. “It’s an essential part of how we achieve a strong, vibrant economy.”

Kristin Dziczek, vice president, Industry, Labor & Economics at the Center for Automotive Research in Michigan, said to restart production there needs to be a tremendous orchestration and “synchronization” across many different regions with different challenges like COVID-19 and different state orders on what is essential manufacturing.

Reporting by David Shepardson and Ben Klayman; Editing by Chizu Nomiyama, Jonathan Oatis and Cynthia Osterman

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