May to be a ‘crucial test’ for auto industry, province says
Ontario this week will unveil sector-by-sector guidelines for how businesses can re-open and operate safely, as automakers look to resume vehicle production in May amid the COVID-19 pandemic.
“As more and more parts of our economy and more and more workplaces open up, those clear guidelines will be in place,” said Vic Fedeli, Ontario’s minister of economic development, job creation and trade. “That will be critical not only in keeping COVID-19 at bay, but it will be helpful for employees to understand the safety precautions that are being taken and for the general public to understand that the sector has safety and the health and wellbeing of their workers” in mind.
Fedeli said Labour Minister Monte McNaughton will make the announcement later this week, though he declined to elaborate.
The guidelines will come as auto manufacturers in Ontario grapple with how to safely resume production, which has been stopped since mid-March. Automakers, suppliers and unions have been developing procedures to make factory floors safe and as conducive to physical distancing as possible, though production appears unlikely to resume until mid-May at the earliest.
COMPLICATED
Re-opening plants is likely to be complicated, given the global nature of the supply chain and varying government orders in U.S. jurisdictions. Michigan Gov. Gretchen Whitmer, for instance, has said the state would take a “hard look” at whether manufacturing can resume as restrictions loosen.
Fedeli said auto manufacturers would be able to resume production in Ontario whenever they are able to safely do so, as manufacturing is listed as an essential business under the province’s emergency order. The order, which closed dealership showrooms, is in effect through May 12.
“In the case of the auto sector, it was by choice that the companies shut down, and so it will be by choice as they open up,” he said. “But they will have sector-specific labour guidelines coming out for them this week.”
He said May would prove to be a “crucial test” for the auto industry as it looks to resume manufacturing and aim for a rebound in vehicle sales, which have collapsed as consumers stayed home and showrooms were forced to close.
“It will first depend on how the companies ramp up and how the public reacts,” he said. “I think May will be an important month, and June will be a far greater indicator, as well. Hopefully by that time everybody will be up and running at their own choice.”
MEDICAL SUPPLIES A PRIORITY
Many manufacturers in recent weeks have focused on producing personal protective equipment such as masks, as well as ventilator parts, in order to address medical supply shortages in Canada. General Motors, for instance, said last week it would build about one million masks per month at its Oshawa, Ont., factory. Many Canadian suppliers, including Magna International Inc. and Linamar Corp., have also shifted production to medical equipment.
Fedeli said the province is encouraging manufacturers, in the auto sector and others, to continue building PPE permanently in order to address the crisis. The province has set up a $50-million fund to help manufacturers re-tool in order to build medical supplies. Fedeli said the province was “in the process of signing contracts” with businesses to access those funds, though he declined to say if any auto companies were among them.
“The premier has said never again do we want to be beholden to companies around the world,” he said. “We should be making this PPE ourselves. Now, whether anybody in the auto sector chooses to remain in the PPE business or not is up to them, but I suspect they’ve got a lot of work to focus on the auto side.”
While the province will not force manufacturers to continue producing medical equipment that is in high demand, he said the province aims to become a net-exporter of those supplies as the pandemic continues globally.
“This pandemic proved that we ended up becoming beholden to organizations outside of Ontario,” Fedeli said. “We’ve learned more about that — whether it’s masks, gowns, sanitizers or wipes, any of those products — we are fully engaged in making sure that we make all of that in Ontario for Ontario, for Canada and for export to the States and worldwide. That’s how big we want this business to be now.
“There’s a worldwide demand, and this is obvious. It’s going to continue for some time as we get into a post-COVID new normal. There will be masks involved and sanitizer for quite some period of time. We want to be on the front end for delivery for Ontario, Canada and worldwide.”