Ford Motor Company (NYSE: F) intends to restart the assembly lines at its North American factories on May 18, the automaker announced Thursday afternoon. The plants have been closed since March 19 because of the coronavirus pandemic.
The Detroit-based company will phase in operations with its parts distribution centers resuming full operations on Monday, a week ahead of the reopening of the assembly plants. The announcement came as Michigan Gov. Gretchen Whitmer gave the go-ahead for manufacturers in the state to resume operations.
“Manufacturing is an important part of our economy — there is no question,” the governor said in a news conference Thursday. She noted that manufacturing accounts for 19% of the state economy.
Whitmer’s order requires specific health safety procedures, including temperature checks and daily screenings of every employee for symptoms or contacts with people who are infected. “As we’ve done the risk assessment, we feel comfortable that with these safety protocols we can safely re-engage,” she said.
Michigan a Hot Spot for COVID-19
The three automakers shut down production on March 19 because of COVID-19, initially expecting to reopen on March 30. As the pandemic spread and Michigan became a hot spot for infections and deaths, the stoppage was extended. Ford also announced in March that it was suspending its dividend.
As of Thursday, COVID-19 had claimed the lives of 4,343 people in Michigan. The disease has killed at least 75,000 individuals nationwide.
A statement from Jim Farley, Ford’s chief operating officer, emphasized safety as the company prepares to resume production.
“We have reopened our facilities in China, successfully begun our phased restart in Europe and have been producing medical equipment in Michigan for more than six weeks and are using the lessons from all of that to ensure we are taking the right precautions to help keep our workforce here safe,” Farley said.
UAW Focuses on Safety
Union leader Rory Gamble had a measured response.
“We all knew this day would come at some point,” said Gamble, president of the United Auto Workers. “While the companies have the sole contractual right to determine the opening of plants, our UAW focus and role is and will continue to be, on health and safety protocols in which we have the contractual right to protect our members.”
Ford was already struggling when the COVID-19 pandemic hit, forcing all but essential workers to stay at home. Last week the company reported first-quarter 2020 results of an adjusted diluted per-share loss of $0.23 on revenues of $34.3 billion. That compares earnings per share of $0.44 on revenues of $40.3 billion for the first quarter of 2019. Analysts had been expecting a loss per share of $0.06 and revenues of $34.5 billion.
In Friday’s premarket session, Ford stock traded up about 1.5% at $4.94 in a 52-week range of $3.96 to $10.56. The 12-month price target on the stock is $6.09.
While the assembly lines will begin moving again, they will not be running at full capacity. Plants that normally run three shifts per day will cut back to two shifts. Production centers that operate on two shifts per day have only one shift.
At least two facilities – Flat Rock Assembly Plant in Michigan and Oakville Assembly Complex in Ontario – will not reopen until the week of May 25.
64-Page Guide for Returning Employees
Gary Johnson, Ford’s chief manufacturing and labor officer, said the phasing in of operations would allow the company to see whether its new procedures were sufficient. “We’ve developed these safety protocols in coordination with our union partners, especially the UAW, and we all know it will take time to adjust to them,” Johnson said.
The automaker has published a 64-page Manufacturing Return to Work Playbook for employees that details safety procedures, like washing hands, wearing masks and social distancing. It also explains that cafeterias are closed and that microwave ovens must be cleaned before and after each use.
Ford is making face masks at its Van Dyke Transmission Plant in Sterling, Michigan, and face shields at its Troy Design and Manufacturing facility in Plymouth, Michigan. Company-provided face masks will be required for anyone working at a Ford location. Safety glasses or face shields may also be required in some cases.
Employees who can will continue to work remotely.