Lear CEO Scott on rebooting after COVID-19 shutdown: ‘It's not a one-size-fits-all strategy'

Flint, Mich. — When auto supplier Lear Corp. penned and then published its "Safe Work Playbook" on April 6, the idea of returning to work in Michigan seemed a distant reality. The state's daily COVID-19 numbers remained on the rise, recording more than 1,500 new cases and 110 deaths. The curve was not going to flatten for another three weeks.

The company has suffered casualties. At least 13 people died from an outbreak at its plant in Juárez, Mexico. Others have fallen ill across plants in the U.S. prior to Lear shutting down operations last month.

But Lear had reopened plants in China, including four locations in the epicenter of Wuhan, two weeks earlier in late March and would reopen plants in South Korea, Italy, Spain and Germany throughout April. Lear released an updated version of its playbook on April 27. The 80-page document is the culmination of what it learned and how it implemented health protocols and created a framework to reopen plants and do so with employee safety at the forefront.

Those protocols include strenuous cleaning regimens, temperature checks, plexiglass guards in high-traffic areas and more. The company is even testing new technologies, such as thermal cameras that can monitor employees' temperatures on the shop floor in real time.

CEO Ray Scott calls it a living document, one that's consistently updated with lessons learned from each plant reopening. But it's also a document about living ... and how and whether the broader workforce can remain healthy without a cure for the COVID-19 pandemic that's claimed the lives of nearly 90,000 Americans.

A few days before roughly 225 of the plant's 675 employees returned to work May 18, Crain's Detroit Business, a sister publication of Plastics News, sat down at the plant with Scott, 54, during an "open house" for plant production leaders in Flint to acclimate them with the new safety protocols.

Q: Look, I'll be honest, I'm nervous about being in a plant right now. Are you?
Scott: I'm much more comfortable than I used to be. I can appreciate what you're saying because when I was getting back into it I kept thinking, 'This doesn't feel right.' But I don't have those anxieties anymore. I'm more focused now and I'm definitely confident that we've done everything we can to put plans in place while we shut down to protect our people. I'm not going to do anything in respect to putting production over people. If we need to shut down again, we'll shut down. If that means we can't produce to our release schedules, then we won't. We're going to make sure our people are safe. With that mentality and the procedures we've put in place, I do feel confident. We, as a company and business, can't stop the virus. But with the right protocols, and we've already proven this, we can stop the spread within a plant. The feedback we're getting back from employees, they feel safer at work than they do in some cases at home.

Q: You were the first company, at least to my knowledge, to come out with a reopening guide. Were you nervous about putting that out and being wrong?
Scott: I had concerns, especially in trying to take a leadership position in an area where people could criticize quite a bit on how it's not a failsafe or that the spread of the virus still happened. I had a lot of conversations with our general counsel all the way to the day before we released it because of those concerns. But we did put a disclaimer in there. This is a repository of what we've learned. We have no ego with it. If we find a better practice, we'll update our playbook just as quickly. But I think the thing that led to my final decision was that it was an incredible piece of work from the team. If one company doesn't understand the amount of work it takes to run safely, then the whole supply chain is in trouble. If one goes down, we could all go down. In the best interest of all of us, if we're sharing ideas, the better we'll be. It's been downloaded some 25,000 times now from restaurants to furniture makers. I never ever expected the level of response we got.

Q: You've been open in Europe for three weeks and China longer. What adjustments to your playbook have you had to make?
Scott: It's not a one-size-fits-all strategy, but it's a combination of things. Some of the changes have been small. We found the queue, the lineup to get into a facility, wasn't properly thought through. It's good to understand when you're trying to funnel in 50 to 100 people or more at a particular time what that queue should look like. Even though we had it spaced out appropriately for the start of the line, there was a bottleneck at the back of the line where people ended up being on top of each other, which is exactly what you don't want to have entering the facility. So we had to make some adjustments there. Traceability is also something we're continuing to learn. Eliminating the amount of access employees have throughout a plant is critical (to stopping spread). You could have a maintenance person that has access to the whole plant. You really want to minimize the potential exposure that even one individual can have on the plant. If you have somebody that's been infected in a particular cell, it's much easier to quarantine that particular area as opposed to the whole plant.

Q: You've had outbreaks at plants, such as Mexico, correct?
Scott: The city of Juárez has experienced a large number of cases which have been difficult to confirm as COVID-19 due to lack of testing capacity. It has been very challenging for us to get accurate and timely information about employee health, since the plants have been closed. We didn't learn of our first employee hospitalization until several days after operations ceased (in late March). We've never seen the problems we had in Mexico. Even though Mexico (shut down manufacturing operations), they never really practiced social distancing and that created a lot of problems with a lot of companies. If there's anything there, we've got to make sure we're continuing to educate on why you're doing certain things and hopefully that can resonate outside of work. We had an issue in Tuscaloosa (Ala.) where one of our employees came down with COVID-19. We did a great job. We protected all of our employees by quarantining that situation quickly. It did not impact any other employees, thankfully. But (the employee) was at a party over the weekend with a bunch of people. That's part of the problem. You can see it everywhere. I was driving down Woodward two Sundays ago and I thought it was the Dream Cruise. People were outside sitting next to each other, high-fiving each other because it was the first nice day. That's a problem. And it speaks to this range of individuals that either say it's fake, it's all politically motivated, to the individual that will literally be upset with you if you come within 6 feet of them. We have this population that is on two different spectrums but then the rest of us are in the middle saying we have to get back to work sometime, so let's be diligent and be smart. But there's this bell-shaped curve with extremists on each side we're also trying to help along. If we can teach those people why they should be practicing these types of behaviors, I think you've come a long way. You're balancing things right.

Q: Is that why the plan is very heavy on pandemic response and quarantining? It's the realization that you can't prevent all exposure?
Scott: Look, we can't stop the virus outside of our plant, there's a lot of things we don't have control over. But inside our plant is where we have the ability to stop the spread of the virus, and that's what we're focused on. This isn't a cure for the virus, but it is making sure we have all the right protocols to protect from spread in the event somebody comes into our plant that is a carrier. Critical for execution is communication. Because I'll tell you what I have found is you have people who believe that this is fake and not real, to the extremists who believe they should wrap themselves in cellophane and never leave the house again. The first challenge of all of this was educating employees on what we know about the virus, and what we do know changes, but providing what they need to know when they come back in the work environment. I feel very comfortable that if you follow the protocols, you can be safe. That's one of the tougher things ... maintaining that sense of urgency and focus on the disciplines and not getting lackadaisical. I think right now, as we begin to start back up, everyone is overly sensitive and focused on the virus, but if (a company and leaders) maintain the driving sense of urgency over a long period of time and allow employees to be comfortable with speaking up, people get more comfortable.

Q: The automakers shut down operations in Michigan in late March and Gov. Gretchen Whitmer's "Stay Home" order prevented the industry from coming on line sooner. Did that help or hinder your ability to restart safely?
Scott: I think the downtime gave us a chance to reset and prepare. It wasn't that long ago that there was no (personal protective equipment) available. Trying to get your hands on mass quantities of PPE was nearly impossible. If the whole industry was pulling at PPE at the same time as hospitals and nurses needed it, we would have put even more pressure on our medical community. I think there were a lot of benefits to shutting down and recalibrating and determining best practices. Let's also not forget how fast things were changing. The CDC at first recommended not wearing a mask in public then to wearing a mask. So this has evolved quickly and shutdown gave us time to adjust and to understand just how unpredictable this virus can behave and put things in place to allow us to protect our people. So, yeah, I think going down, though terrible and tough on a lot of companies to manage, was something that gave us time to do this right. I think if we had been running production while trying to manage the virus, it would have been much more difficult.

Q: You're operating one shift at most of your plants, when do you think you'll be at full capacity in North America again?
Scott: Our customers feel very optimistic that demand is there. They've had a strong pull through digital sales. For us, even though sales will still be down significantly, year-over-year, the customers are telling us there is a pent up demand for vehicles. But a lot of things still have to get worked out. Like how employment is impacted long term and how well stimulus does. I look at it more of a 12-month to 18-month period. I think we're going to see some demand at least through this year, but not real recovery until the second half of next year.

Q: The "Playbook" and its implementation will likely define your career. Lives literally hang in the balance. Do you recognize the gravity of that?
Scott: Oh, I understand the gravity of that. I think one thing we set up early on as far as what we were going to focus on near term, the first thing was people. That's got to be the No. 1 thing. It wasn't going to be resuming production or trying to get revenue back or trying to drive margins back up. One thing we didn't do as a company is we didn't go out and lay off and furlough everyone (Lear did lay off temporary and some hourly workers). We have a slogan that we all work for the plants. And the worst thing we could have done was let the plant managers and their teams go. If we hadn't stayed focused on the plants, we would have never put together this playbook. I don't know where I'll be looking back, but I do think we got that right and it's critical why we're here right now and why I think our people are safe.