WASHINGTON — Some of the world’s largest auto suppliers told Michigan Gov. Gretchen Whitmer they are ready to restart production and raised alarm about new delays to resuming operations.
Due to the coronavirus pandemic, most suppliers halted operations in late March as automakers closed their factories. Six weeks later, uncertainty about when Michigan will allow the resumption of operations is causing delays throughout the U.S. auto industry.
The Motor & Equipment Manufacturers Association and Original Equipment Suppliers Association told Whitmer in a letter late on Thursday that “delays in re-opening facilities would increase liquidity risk for suppliers and jeopardize long-term capital investment and employment for Michigan.”
The group asked Whitmer “to provide clear authority for automotive suppliers to restart their operations in Michigan at least five days before OEM production begins.”
Auto suppliers in Michigan employ about 125,000 people and are generally paid 45 days after production. Automotive industry executives say that means some smaller suppliers are in danger of running out of money in the coming weeks.
Earlier this week, both Volkswagen Group and Toyota Motor Corp. pushed back the planned resumption of U.S. auto production and cited auto supplier issues as a factor.
Whitmer’s office did not immediately comment but she has held regular talks with the UAW and top executives of the Detroit 3 automakers, officials say.
Most U.S. automakers haven’t committed to hard restart dates, but if they plan to resume production on May 18, as some expect, auto suppliers would need the green light to resume operations during the week of May 11.
The letter said the “Michigan supplier community is ready to restart and we are committed to working with your Administration to build public confidence in our ability to safely reopen our places of business.”
The UAW said last week that it was “too soon and too risky” to reopen auto plants in early May. Canada’s Unifor union has been “cautiously optimistic” about restarts, but is allowing union locals autonomy to make those decisions at the plant level.
The letter noted the dependence of U.S. auto production on Michigan-based suppliers.
“Vehicle manufacturers throughout the country and the world depend on parts and components manufactured in Michigan. Because of this integration, Michigan suppliers are a vital link to the industry’s economic recovery,” the letter said.
It included a list of CEOs of auto suppliers and senior executives from the North American-units of foreign firms supporting the requests such as Continental AG, BorgWarner Inc., American Axle & Manufacturing Inc., Lear Corp., Magna International Inc., Denso Corp., Robert Bosch LLC, Nexteer Automotive and LG Electronics USA.