Automotive News - May 11, 2020 - 22

22 * MAY 11, 2020

Intelligence Report
SECOND IN A SERIES

Automotive suppliers had it rough last year with the U.S.-China trade war, a labor strike at General
Motors and declining sales outlooks for the U.S., China and Europe. But they likely now long for those
days over this year's global industry shutdown in response to the COVID-19 pandemic. Here's how
some of the world's largest parts companies have been affected.

timeline
C O R O N A V I R U S

Jan. 7: The annual CES trade show in Las Vegas, brimming
with parts company executives, might be the supplier
industry's first and last public hurrah for 2020.
Jan. 20: A visiting Webasto employee from Shanghai
introduces the novel coronavirus to colleagues at the
supplier's headquarters in Stockdorf, Germany. Eight days
later, Webasto closes the German offices for two weeks
for a deep disinfecting.
Jan. 23: After a month of growing concern, Wuhan and
three other Chinese cities are put on lockdown to prevent
further spreading of
the virus, curtailing
factory operations
there for
automakers and
suppliers.
Feb. 29: With parts
shipments from
China stopped, GM and other automakers scramble as
certain components grow scarce.
Webasto

March 15: SAE International cancels the WCX 2020 World
Congress, an annual gathering of automotive engineers to
discuss technologies and discoveries.
March 18: Ford, GM, FCA and Toyota say they will halt all
U.S. production, effectively bringing most North American
parts factories to a stop.
March 20: Honda says it will stop North American
production.
March 23: Michigan Gov. Gretchen Whitmer's stay-home
order effectively prohibits auto-parts production for a large
share of the U.S. industry.
March 31: As suppliers around the world tap credit lines
to weather the crisis, BorgWarner warns Delphi
Technologies that its move to draw down $500 million in
credit might jeopardize their planned merger. (In early May,
the companies said the deal is moving forward.)
April 2: President Donald Trump invokes the Defense
Production Act to order GM to make ventilators to assist in
treating people who have COVID-19. Several dozen
suppliers participate in GM's effort, while numerous parts
companies, including Dana, Denso, Lear and ZF, produce
other personal protective equipment for the crisis.
April 6: Lear distributes a 51-page
document, laying out in detail what will
be necessary to restart
manufacturing. CEO Ray Scott later
tells Automotive News that the
document was released publicly to
reach small Tier 2 and Tier 3 suppliers
and make them aware of what will be
Scott
expected for employee safety.
April 13: A tornado rips apart a BorgWarner transfer case
plant in Seneca, S.C., raising concerns that - even when
vehicle assembly resumes - Ford, FCA and Toyota might
not be able to produce large pickups and SUVs that
require the components.
April 17: Faurecia notifies workers at its Saline, Mich.,
plant that it will resume production of Tesla components
April 27, despite Michigan's stay-at-home order. An outcry
from workers over health concerns prompts Faurecia to
delay the reopening.
May 4: Daimler's assembly plant in Alabama is the first in
the U.S. to resume making vehicles, using parts on hand
from before the shutdown.
May 7: Whitmer extends the order banning nonessential
work to May 28 while allowing manufacturing to begin
May 11.

mong executives at ZF
Friedrichshafen's global
headquarters in Germany, there's no sugarcoating the magnitude of COVID19's economic impact. ZF, the
world's fifth-largest auto supplier
last year, says its sales forecast is in
line with current economic forecasts that suggest the moment
represents the "most significant
crisis since 1929."
Most of ZF's factories in China
have resumed production, and
executives believe their gradual
ramp-up in other regions will
ZF's coASSIST autonomous drive system
benefit from lessons learned
is expected to be in production with a major
from ZF's China experience. PerAsian manufacturer by the end of the year.
sonal protective equipment will
be issued to employees, cafeteria
times staggered and sick people
up TuSimple to develop and commercialize autonoprevented from entering buildings.
mous-trucking technology.
ZF has instituted pay cuts for salaried employees and
In the short term, the company said there are no anfurloughs in some instances. Some temporary and perticipated changes related to its pending acquisition of
manent layoffs have been made, but the company did
braking-controls supplier WABCO. The deal is expectnot specify the number of employees affected. Despite
ed to close in the second quarter, pending regulatory
the responses, ZF says it remains committed to its longapproval.
term advanced driver-assist system and self-driving
Meanwhile, ZF has called on its experience in sewing
development plans.
and manufacturing airbags to produce face masks. The
"The automotive industry must balance the shortcompany has made more than 100,000 face masks in
term needs of our new market reality with the essential
locations around the world through a partnership with
need to push ahead on our efforts to make clean mobilDetroit Sewn, a nonprofit connecting makers of perity a reality," the company said in a statement. "The desonal protective equipment with those who need it.
velopment of ADAS and automated driving will continOther ZF employees have taken 3D printers home
ue to be one of ZF's primary goals for next-generation
and are using them to make plexiglass face shields. In
mobility - we will continue to support further investsome cases, they're running the machines 24 hours a
ment there."
day to help front-line workers counter COVID-19.
Just before the pandemic struck, the company inked
- Pete Bigelow
an important partnership with self-driving truck start-

Aisin

oyota Group supplier Aisin
Seiki Co. went into slowdown mode when its biggest
customer, Toyota Motor Corp.,
began suspending output in response to the COVID-19 pandemic.
Most of its U.S. factories have
been offline since the end of March,
although some came back in April.
But Aisin will really start ramping
Aisin will make hospital beds, here,
up in May, as Toyota gets back in acand partitions in the COVID-19 fight.
tion.
Toyota, which accounts for more
Aisin said the pandemic slump has not forced it to
than half of Aisin's global sales, had planned to gradudelay any products, but it wouldn't comment on poally resume U.S. production from May 4 but pushed
tential impact on other projects such as a transmission
that back to May 11. The carmaker's worldwide proplant being built in Texas.
duction tumbled 18 percent in March and was down 11
Aisin said in July it planned to spend $400 million to
percent for the first quarter of 2020.
build the factory to supply Toyota's truck plant in San
In the meantime, Aisin employees not based at the
Antonio, as well as other automakers Aisin has not
plants will continue working at home.
identified. The announcement followed Toyota's move
The slump torpedoed Aisin's profit in the fiscal year
to add production of the full-size Sequoia SUV at the
ended March 31. Operating profit fell 73 percent and
plant next year.
net income crashed 78 percent. Worldwide revenue reIn Japan, Aisin has rallied with other Toyota Group
treated 6.4 percent.
companies to fight COVID-19. In addition to making
Like its Toyota Group counterpart Denso, Aisin repowertrain, chassis and electrical components for cars,
frained from issuing an outlook for the current fiscal
Aisin has a small household equipment unit that
year ending March 31, 2021, citing uncertainty around
makes such things as toilet seats. Aisin plans to marthe pandemic.
shal that know-how into making beds and partition
While announcing earnings, the company said it
walls for medical facilities, in addition to churning out
would change its name from Aisin Seiki Co. to Aisin
its own face masks.
Corp., pending shareholder approval in June. The
- Hans Greimel
change would take effect April 1, 2021.

Automotive News - May 11, 2020

Table of Contents for the Digital Edition of Automotive News - May 11, 2020