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Ford, GM, Fiat Chrysler Aim To Resume US Production On May 18: WSJ

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Ford, GM, Fiat Chrysler Aim To Resume US Production On May 18: WSJ

Three of the largest United States automakers are planning to resume limited production at their manufacturing plants across the country on May 18, according to a Wall Street Journal report published Monday.

What Happened

The timeline set by Detroit-based General Motors Company (NYSE: GM), Ford Motor Company (NYSE: F), and Fiat Chrysler Automobiles NV (NYSE: FCAU) is tentative, based on its discussions with the United Auto Workers, and Michigan Governor Gretchen Whitmer's office, people familiar with the matter told the Journal.

The companies are aiming to start the production on the same day across the country, even in states where lockdowns may be eased earlier, the Journal reported. Michigan's order to close all non-essential businesses in the state expires on May 15, pending further consideration.

Executives of GM, Ford, and Fiat Chrysler have been discussing worker safety protocols with the union, but no agreement has yet been reached, according to the Journal.

Foreign companies with non-unionized workers are planning even earlier resumption dates, the Journal noted. Japanese automaker Toyota Motor Corp (NYSE: TM) could restart limited production on May 4 and Honda Motor Co. Ltd. (NYSE: HMC) on May 11, the Journal learned.

Why It Matters

The three companies voluntarily decided to shutter their production facilities in the U.S. on March 20, as the novel coronavirus (COVID-10) pandemic took hold in the country.

There are 988,469 confirmed COVID-19 cases, including 56,245 deaths, in the U.S. at press time, according to data from Johns Hopkins University.

Authorities have struggled between extending lockdowns to curb the spread of the virus and the economic fallout. Health experts have warned that a sudden easing of lockdowns could worsen the pandemic.

Car companies have been pushed in survival mode as they take massive hits to their revenues due to production shutdowns.

GM suspended its cash dividend and share repurchases on Monday and extended a $3.6 billion credit line, a month after Ford took similar measures.

Price Action

GM shares closed 2.3% higher at $22.45 on Monday and added another 0.6% in the after-hours at $22.59.

Ford closed 6.2% higher at $5.17 and was unchanged in after-hours. Fiat Chrysler closed 4.8% higher at $8.38 and added another 1.2% in after-hours at $8.48.

Toyota shares closed 1.3% higher in New York at $124.20, and Honda closed 3.7% higher at $23.57.

 

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