COVID shutdowns ripple down auto supply chain

As the impact to supply chains from the COVID-19 pandemic begins to materialize, auto suppliers are halting production lines in North America over their customers' shutdowns, some laying off hundreds of employees.

Grand Rapids, Mich.-based ADAC Automotive, which makes injection molded subassemblies, said it has a "very limited" number of associates at its plants to "conduct minimum basic operations."

"ADAC is working with General Motors to identify if we can support production of critical parts for medical ventilators to serve the health care industry and protect our fellow Americans," the supplier said in an emailed statement to Automotive News, a sister publication of Plastics News.

On March 20, Ventra Salem LLC, a subsidiary of auto parts giant Flex-N-Gate Corp., notified the Ohio Department of Job and Family Services it would temporarily stop production due to the virus.

The company told the state that 794 employees could be affected by the temporary shutdown. Flex-N-Gate, based in Urbana, Ill., did not respond to Plastics News' request for comment. Ventra is an injection molding bumper fascia supplier within Flex-N-Gate.

Interior parts supplier Mitchell Plastics, based in Kitchener, Ontario, is laying off 380 employees and halting operations at its locations in Charlestown, Ind., it said in a March 20 notice to the Indiana Department of Workforce Development.

"We hope to recall employees once our customers resume manufacturing operations," the notice said.

Mitchell said it will pay its employees' insurance benefits on their behalf through the duration of the temporary shutdown.

Mitchell Plastics did not respond to multiple emails requesting comment.

Marcellus, Mich.-based injection molder Faith Plastics Inc. notified the Michigan Department of Labor and Economic Opportunity on March 25 it would lay off 53 employees.

Three of Faith Plastics' customers "suddenly and unexpectedly" temporarily closed North American facilities due to the pandemic, the molder said in its notice to the state.

"It is expected that the layoff will be temporary; however, the estimated duration is not known at this time," Faith Plastics said.

The virus is also impacting earnings expectations for publicly traded companies.

Global auto supply giant Magna International Inc. withdrew its 2020 forecast due to the pandemic, Automotive News reported.

Magna said its investors "should take comfort from the fact that we have liquidity of approximately $4 billion including approximately $1 billion in cash and $3 billion in available, committed credit lines at Feb. 29, 2020."

In the meantime, Magna said it is working to help source and produce critically needed supplies and equipment for the health care sector.

"Our global purchasing organization has been successful in securing significant quantities of masks for local hospitals and health care authorities," the supplier said.