US auto industry starts to return to life after lockdown

Workers arrive for an early-morning shift at the reopened Warren Truck Assembly Plant in Warren, Michigan, on Monday. (Reuters)
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Updated 19 May 2020

US auto industry starts to return to life after lockdown

  • Suppliers gear up to support a sector that employs nearly 1 million people in America

WARREN, Michigan: The US auto industry slowly returned to life on Monday, with some vehicle assembly plants reopening after the coronavirus lockdown while suppliers geared up to support a sector that employs nearly 1 million people.

On a chilly and damp Monday morning, hundreds of workers at Fiat Chrysler Automobile’s (FCA) truck plant in Warren, Michigan began lining up to start the shift. Signs overhead read: “Let’s restart.”

“I’m a little nervous,” said Larry Smith, 53, of New Baltimore, who works on wheel alignment away from the assembly line. “They made all the precautions (and) they’ve done everything they can to prepare us ... I’m trusting in God.”

FCA reopened four US assembly plants on Monday, including Warren Truck, on a single shift, as well as four parts plants.

The reopening of car plants will be a closely watched test of whether workers across a range of US industries can return to factories in large numbers without a resurgence of infections.

Auto companies have rolled out safety measures to protect workers, including the use of temperature monitors for those entering plants, personal protective equipment such as face masks and shields, and revamped and deep-cleaned factory floors that emphasize social distancing and more.

Theresa Segura, 61, of Lincoln Park, arrived for work at the Warren plant on Monday but was immediately sent home after noting on an FCA questionnaire that she had been exposed to a family member who had just tested positive for the virus.

Segura, who has worked at the truck plant since 1993, said she thought that it was in any case too soon to reopen “because there are still people sick out there.”

“We’re risking our lives going in there,” said Segura, who works as a “floater,” moving from job to job at the plant as needed.

General Motors Co. (GM), Ford Motor Co. and FCA all have been preparing for weeks to reopen their North American factories in a push to restart work in an industry that accounts for about 6 precent of US economic activity.

For the automakers and their suppliers, many of which began reopening their plants last week, the restart is critical to ending the cash drain caused by a two-month shutdown that was forced on them by COVID-19.

The emphasis is on getting assembly lines again producing such profitable vehicles as GM’s Chevrolet Suburban SUV, Ford’s F-150 pickup truck and FCA’s Jeep Wrangler SUV.

“Ultimately we’re in this together. Because if we don’t build trucks, Ford Motor Co. is gone,” said Todd Dunn, president of UAW Local 862, the union that represents more than 14,000 hourly workers at Ford’s two Kentucky assembly plants, which build trucks and SUVs.

President Donald Trump on Thursday will tour a Ford manufacturing plant in Michigan that has been repurposed to make ventilators and personal protective equipment, according to the White House.


Oil surges on hopes of new deal on output cuts

Updated 02 June 2020

Oil surges on hopes of new deal on output cuts

  • Brent price has doubled in five weeks
  • OPEC talks may be brought forward

DUBAI: Oil prices surged toward $40 a barrel on Monday as hopes rose for an early agreement to extend the big production cuts agreed by Saudi Arabia and Russia under the OPEC+ alliance.

Brent, the global benchmark, jumped by more 9 percent to nearly $39, continuing the surge that has doubled the price in five weeks — the best performance in its history. It recovered after record supply cuts agreed between the 23 countries of the OPEC+ partnership, and enforced cuts in US shale oil.

DME Oman crude, the regional benchmark in which a lot of Saudi Aramco exports are priced, rose above $40 a barrel for the first time since early March.

Market sentiment was buoyed by the possibility that the Organization of Petroleum Exporting Countries would agree with non-OPEC members to extend the cuts for a longer period than was agreed in April.

Oil analysts expect OPEC to fast track a “virtual” meeting to formally agree to maintaining cuts at the record 9.7 million barrels a day level. The meeting was scheduled for June 9, but bringing it forward would allow producers more time to set pricing levels.

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An official with one OPEC delegation told Arab News there was consensus among the 23 OPEC+ members for the new date, which could be as early as June 4. The meeting will also consider how long the current level of cuts would be maintained. Some OPEC members want it to run to the end of the year, other producers would prefer a two-month extension.

Omar Najia, global head of derivatives with trader BB Energy, told a forum run by Gulf Intelligence consultancy: “I’d be amazed if OPEC did not extend the higher level of cuts. As long as Saudi Arabia and Russia continue saying nice things to each other I’d expect the rally to continue.”

A Moscow source close to the oil industry said energy officials there had come to the conclusion that “the deal is working” and it was important to keep prices at an “acceptable” level.

Sentiment was also affected by a comparatively high level of compliance with the new cuts, running at about 75 percent among OPEC+ members, with only Iraq and Nigeria noticeable under-compliers.

Robin Mills, chief executive of Qamar Energy, said: “That’s where I’d expect it to be after two months in such a fluid situation. It will be even better in June.”