Manufacturing back to work, but it can only do so much
Gov. Gretchen Whitmer announced May 7 that manufacturers could resume operations on May 11, catering to auto industry demands that would facilitate automakers starting limited production on May 18. The governor’s hand was likely forced as manufacturers in nearby Indiana and Ohio restarted May 4, and the supply chains in the tristate area are intertwined.
As Whitmer said during her press conference last week announcing a six-stage plan for economic reentry, manufacturing accounts for 19.38 percent of the state’s $541.6 billion gross domestic product. It also employs 14.24 percent of the workforce, according to data from the National Association of Manufacturers.
Livonia’s AlphaUSA, a metal stamper of fastener products, plans to reopen Monday but with only 12 of 130 employees on site, said David Lawrence, chief administrative officer — less than 10 percent of the workforce.
Detroit-based auto seat sequencer and assembler Bridgewater Interiors LLC is recalling fewer than 30 of its 2,400 workers, or about 1.25 percent, on Monday, said Ron Hall Jr., president and CEO and member of the governor’s Michigan Economic Recovery Council that’s advising on reentry.
Those employees will be assisting seat maker Recaro on “essential” ambulance projects. The week of May 18, Bridgewater will return upward of 600 to 1,000 workers, Hall said.
“I think it’s going to be a slow summer,” Hall said. “But our success, as manufacturers, is dependent on our ability to be even more disciplined in the execution of sound safety processes than we ever have been. That’s been an imperative for good product, but now even more of an imperative for safety. Safety culture will require a level of discipline that is new.”
Whitmer issued a threat that if industry doesn’t get it right, she is willing and able to shut it down again.
“We still have to be vigilant across our state,” Whitmer said. “Letting our guard down now squanders all the hard work we’ve put into this state. As we proceed, all the decisions are to lower the possibility of that (second) wave. We will remain nimble …. but we’ll pull back if we see a spike in cases.”
Whitmer released her six-stage plan only last week — we’re currently in the flattening stage, or stage three — and indicated other sectors could start to reopen as early as two weeks from now. Stage 4 of the plan allows for the return of “other retail” and office workers, though working from home is still encouraged.
About 456,000 people work in Michigan’s retail sector, but it’s impossible to know how many would return under Whitmer’s less-than-clear “other retail” classification. Restaurants and education institutions won’t be allowed to return to work until Michigan reaches the fifth stage of COVID-19 recovery, called containing. Approximately 249,000 of the state’s 330,000 bar and restaurant workers are laid off, according to the Michigan Restaurant and Lodging Association. For them to return, the state must have a robust testing and tracing system in place.
That’s about as deep as the governor’s plan goes. It’s unclear what constitutes a robust system, but the state has hired 2,000 people to perform the task in recent weeks.
And it’s unclear how many current office workers are still employed but working from home. Crain’s Detroit Business staff is currently working remotely, for instance.
Nevertheless, Michigan’s economy may hopefully have bottomed out. At least a portion of the state’s manufacturing sector returned to work. It won’t be enough to broadly impact Michigan’s astonishing 1.33 million unemployed figure nor rescue the rest of the economy. But it’s a start.
Hall is confident manufacturing will return to full capacity by the end of 2020.
“Emerging from this pandemic crisis, we’re confident we’ll have people all our people back to work by the end of the year,” Hall said. “Do these safety protocols right, then businesses won’t be contributing to any increase in infection rates and we’ll be back for good.”
Posted By: Crain’s Detroit Business on May 10, 2020. For more information, please click here to read the source article.
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