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  2. Quarantine Chronicle
March 19, 2020 07:41 AM

Unclear output outlook

Luca Ciferri
Luca Ciferri
Associate Publisher and Editor of Automotive News Europe
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    Editor's note: Luca Ciferri, editor and associate publisher of Automotive News Europe, is living under quarantine at his Italian home in Villastellone, just south of Turin. He will be filing daily updates in this blog post.

    By the end of this week, the vast majority of automaker and supplier production plants in Europe will stop operating. It was just a week ago that plants began closing in Italy. The break gives companies time to sanitize work zones and to modify them to create more distance between people.

    The big question is: When will plants resume production?

    That's difficult to answer because of a complex combination of economical, mechanical and human factors.

    Economically, it doesn't make sense to produce parts for cars and car for customers  when dealers will be closed for weeks in three of Europe’s five largest markets – France, Italy and Spain. Online sales traffic is growing, some automakers told me, but digital channels still account for a fraction of all car sales.

    Manufacturing experts say that a plant can be slowed down but should never stop. That was unavoidable because of the virus.

    When factories do restart, their production will be reduced, meaning that a plant that was working three shifts before the crisis will drop down to two shifts.

    There is also a human factor that should not be underestimated.

    The closure of schools in France, Italy and Spain has left many workers with insurmountable childcare challenges. Prior to the crisis, workers could ask their parents, relatives or friends to take care of their kids. Not anymore.

    This challenge combined with the fear of catching the virus at work caused absenteeism levels to reach 40 percent at some plants, I was told.

    Despite these issues, production at some European plants is expected to resume early next month, probably with reduced shifts to ensure there are enough workers available to properly run assembling lines.

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