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How Carmakers Are Dealing With Coronavirus Amid Shutdown
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On Apr 13, Toyota Motor Corporation (TM - Free Report) announced that it is extending shutdown at its Brazil plants until June. General Motors Company (GM - Free Report) also plans to resume production in its Brazil facilities in the same month. The coronavirus outbreak is biting into the profits of carmakers, with most having halted production in both North and South America.
The prolonged shutdown has led to a considerable decline in auto sales in the past month with losses likely to run through the second quarter. However, a number of carmakers have also taken to production of ventilators, responding to the appeal of the government, which has been facing acute crisis of protective gear and medical equipment to fight the pandemic.
Carmakers Extend Shutdown
On Monday, Toyota said that it has suspended production at its Brazil plants till at least Jun 22, as coronavirus cases continue to soar in the country. General Motors too is contemplating extending shutdown at its Brazil plants for at least another 60 days. General Motors’ Brazil facilities have been shuttered since Mar 23. A week later, the company put its workers on furlough, but kept their pay intact as it made employees use up vacation days. Also, last week, Hyundai Motor Co. (HYMLF - Free Report) said that it will extend shutdown at its Brazil plant till Apr 24.
Other major automakers such as Fiat Chrysler Automobile N.V. and Volkswagen AG (VWAGY - Free Report) are yet to announce when they expect to resume production in Brazil. Although Brazil is South America’s top auto producer, most companies having operations there have kept their plants closed. This has been hurting major automakers. Ford Motor Company (F - Free Report) on Monday said that it expects to report an adjusted pretax loss of about $600 million for the first quarter as coronavirus continues to hurt its sales and production. The company also said that total revenues for the first quarter are expected to be about $34 billion, down 15.7% from a year ago. Ford carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Carmakers Take a Different Route
Major carmakers have also suspended production at their North American plants. Although many are planning to resume production earlier in their European facilities, most are yet to provide a specific timeframe.
Meanwhile, many of these carmakers have joined the fight against coronavirus by responding to the government’s request to ramp up production of ventilators in order to fulfill the shortage in U.S. hospitals. The need of the hour has seen some interesting partnerships between medical device makers and car manufacturers.
General Motors is working with Ventec Life Systems to produce ventilators at its Kokomo, IN factory. The plant has only 300 employees but General Motors plans to add more workers and take the number to 1,000. Ford has teamed up with GE Healthcare Systems to produce 50,000 ventilators by July.
The carmaker will also begin production of new powered air-purifying respirators in collaboration with 3M Company (MMM) at its Michigan plant starting this week. The work will be done by about 90 paid volunteers from the United Auto Workers union.
Electric carmaker Tesla, Inc. (TSLA - Free Report) has also expressed its desire to produce ventilators to help healthcare workers treating COVID-19 patients. Earlier this month, Fiat started production of ventilator components to help Italy, which is one of the hardest hit by coronavirus.
Carmakers have been incurring losses with production coming to a standstill. However, at the same time they are trying to put up a fight not only against the deadly virus by producing ventilators but also for their own survival amid this crisis.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
How Carmakers Are Dealing With Coronavirus Amid Shutdown
On Apr 13, Toyota Motor Corporation (TM - Free Report) announced that it is extending shutdown at its Brazil plants until June. General Motors Company (GM - Free Report) also plans to resume production in its Brazil facilities in the same month. The coronavirus outbreak is biting into the profits of carmakers, with most having halted production in both North and South America.
The prolonged shutdown has led to a considerable decline in auto sales in the past month with losses likely to run through the second quarter. However, a number of carmakers have also taken to production of ventilators, responding to the appeal of the government, which has been facing acute crisis of protective gear and medical equipment to fight the pandemic.
Carmakers Extend Shutdown
On Monday, Toyota said that it has suspended production at its Brazil plants till at least Jun 22, as coronavirus cases continue to soar in the country. General Motors too is contemplating extending shutdown at its Brazil plants for at least another 60 days. General Motors’ Brazil facilities have been shuttered since Mar 23. A week later, the company put its workers on furlough, but kept their pay intact as it made employees use up vacation days. Also, last week, Hyundai Motor Co. (HYMLF - Free Report) said that it will extend shutdown at its Brazil plant till Apr 24.
Other major automakers such as Fiat Chrysler Automobile N.V. and Volkswagen AG (VWAGY - Free Report) are yet to announce when they expect to resume production in Brazil. Although Brazil is South America’s top auto producer, most companies having operations there have kept their plants closed. This has been hurting major automakers. Ford Motor Company (F - Free Report) on Monday said that it expects to report an adjusted pretax loss of about $600 million for the first quarter as coronavirus continues to hurt its sales and production. The company also said that total revenues for the first quarter are expected to be about $34 billion, down 15.7% from a year ago. Ford carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Carmakers Take a Different Route
Major carmakers have also suspended production at their North American plants. Although many are planning to resume production earlier in their European facilities, most are yet to provide a specific timeframe.
Meanwhile, many of these carmakers have joined the fight against coronavirus by responding to the government’s request to ramp up production of ventilators in order to fulfill the shortage in U.S. hospitals. The need of the hour has seen some interesting partnerships between medical device makers and car manufacturers.
General Motors is working with Ventec Life Systems to produce ventilators at its Kokomo, IN factory. The plant has only 300 employees but General Motors plans to add more workers and take the number to 1,000. Ford has teamed up with GE Healthcare Systems to produce 50,000 ventilators by July.
The carmaker will also begin production of new powered air-purifying respirators in collaboration with 3M Company (MMM) at its Michigan plant starting this week. The work will be done by about 90 paid volunteers from the United Auto Workers union.
Electric carmaker Tesla, Inc. (TSLA - Free Report) has also expressed its desire to produce ventilators to help healthcare workers treating COVID-19 patients. Earlier this month, Fiat started production of ventilator components to help Italy, which is one of the hardest hit by coronavirus.
Carmakers have been incurring losses with production coming to a standstill. However, at the same time they are trying to put up a fight not only against the deadly virus by producing ventilators but also for their own survival amid this crisis.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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