Southern plants to test supply chain readiness

A handful of Southern vehicle assembly plants plan to join Daimler's factory in Alabama in resuming operations after being idle for weeks because of the COVID-19 pandemic.

BMW aims to power up assembly lines at its largest factory in the world, the crossover plant in South Carolina.

It will be joined by Hyundai and Kia plants in Alabama and Georgia, after Daimler said it restarted its crucial plant in Vance, Ala., last week.

As factories rumble to life — again assembling vehicles and generating revenue — the initial weeks will serve as a trial run of new physical-distancing measures on the assembly line and a test of supply chain readiness. Automakers want to get up and running as quickly as possible to see where the weak points are and how the supply base responds, said Jeff Schuster, president of global forecasting at LMC Automotive.

"There could be some moments where the line's going to have to go down, or they are going to have to temporarily halt production because they don't have parts," Schuster said.

The sustained return of auto manufacturing in the U.S. hinges on the supply chain's ability to get its factories humming. With manufacturing powerhouses such as Michigan and Mexico still in lockdown, supply chain readiness remains uncertain.

"There are few cars built in this country that don't have parts from Michigan," said Doug Betts, president of the automotive division at J.D. Power.

Last week, several large suppliers and two trade groups sent a letter to Michigan Gov. Gretchen Whitmer asking to resume manufacturing at least five days before assembly plants restart and warning extended delays risk a significant cash crunch.

The supply chain, which spider-webs around the globe, is especially compromised by the pandemic. As the novel coronavirus spread from China, it brought down different parts of the supply network.

Even before COVID-19 cases began ravaging the U.S., automakers were scrambling to source parts as supplier factories in China and Europe shut down.

A Daimler spokeswoman last week declined to disclose output at the restarted Alabama plant or say when all three production shits are expected to resume. Only one shift worked last week.

BMW said it initially will operate its Spartanburg, S.C., assembly plant at about 50 percent capacity as the automaker assesses customer demand and supply chain capacity.

"We continue to monitor global demand and will increase these numbers as the situation dictates," spokesman Phil DiIanni said, declining to say when full production would resume.

To start, BMW said it will build vehicles with parts stocked from before the shutdown. "We are working with suppliers to plan the ramp-up based on their individual situations," DiIanni said.