Tesla did a phenomenal job by building a record number of new vehicles during the first quarter of 2020 despite its factory in Shanghai being shut down for several weeks due to the coronavirus. On March 23, however, it had to suspend production at its US factory in Fremont, California. CNBC reports it has now terminated several hundred contract workers both at the Fremont facility and at Gigafactory 1 in Nevada.
CNBC says it has viewed a memo from Balance Staffing to dismissed workers which reads: “It is with my deepest regret that I must inform you that the Tesla factory shutdown has been extended due to the COVID-19 pandemic, and as a result, Tesla has requested to end all contract assignments effective immediately.” Contractors hired through other temp agencies were getting similar notices on Thursday and Friday, according to the workers who spoke to CNBC.
The agency told the contract workers they will remain Balance Staffing employees and could find other work with the agency’s help, but at a time when layoffs are occurring by the millions all across America, that seems unlikely. It said it would work to get them their old jobs back with Tesla when and if circumstances permit.
That could be a while from now, as the world of manufacturing is being mauled by the virus and a government that ricochets from one policy response to another on a daily or hourly basis, making any planning virtually impossible.
Rivian Shuts Down
Other car companies are also caught up in the COVID-19 pandemic. Rivian was pushing hard to begin production of its electric vehicles, as shown in the accompanying video, but now it too has announced it is shuttering its factory in Normal, Illinois, due to the virus, according to Inside EVs. The video gives a close-up look at the Rivian factory, where Mitsubishi used to build cars.
In its introduction to the video on YouTube, the company says, “Just before temporarily shutting down our facilities to help slow the spread of COVID-19, we made this internal video progress report so our team across all locations could see how far the plant has come. We can’t wait to get back in there.”
The same can be said for Lucid Motors, which has had to delay construction of its factory in Arizona and the introduction of its first electric car, the Lucid Air. Other automakers such as Ford, GM, Dodge, Honda, and Toyota have shut down their US factories until the fallout from the coronavirus becomes clear. Some industry observes think sales of new vehicles in the US could plummet from nearly 17 million a year ago to as few as 10 million this year. Even that may be optimistic if the stranglehold the virus has on the economy continues.
Everything in the world of manufacturing is in a holding pattern for the time being. The question now is whether the economy will ever return to normal, not when.
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