Car manufacturers scramble as Shanghai shuts down

The new GM logo appears on the facade of GM’s headquarters in Detroit, Michigan, US, March 16, 2021. REUTERS/Rebecca Cook

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SHANGHAI (Reuters) – The coronavirus shutdown of Shanghai hampered auto production on Tuesday as two major suppliers joined Tesla. (TSLA.O) In closing factories to comply with the measures to control the spread of the Corona virus.

General Motors Corporation (GM.N) Two people familiar with the matter said a joint venture in Shanghai maintained production by requiring workers to sleep on factory floors and obtaining permits for trucks to continue deliveries.

Major Automotive Supplier, Aptiv PLC (APTV.N), told workers at one of its Shanghai facilities that supplies the Shanghai joint venture of Tesla and General Motors to go home on Tuesday due to the need to enforce COVID controls, people briefed on the procedure said. Read more

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thyssenkrupp (TKAG.DE) It said it has closed its powertrain production facility in Shanghai until April 6 to comply with local coronavirus regulations.

The shutdown of Aptiv and Thyssenkrupp came on the second day of the lockdown in Shanghai, which is home to 26 million people and a major manufacturing hub for vehicles and other goods. The city has put in place strict controls on people’s movements to try to control the spread of the highly contagious variant Omicron.

The shutdown, one of the biggest tests of China’s “zero COVID” strategy, has forced automakers and suppliers to either try to adapt to extreme measures to keep factories running or to close and risk delayed shipments at a time when vehicle demand is strong.

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German auto supplier Bosch said Tuesday that its two factories in Shanghai are working with fewer employees. “We are doing our best to maintain supply chains as much as possible and to meet the demands of our customers,” the company said in a statement.

For global automakers and suppliers, the latest coronavirus-related disruptions in China, the world’s largest market, are piling on top of problems created by the war in Ukraine. Read more

Measures by General Motors to keep its Shanghai plant open equate to a “closed-loop” management process, which the Chinese financial hub has required companies to adopt to stay open during a two-phase shutdown to combat the outbreak.

In the bubble-like arrangement, workers sleep, live and work in isolation from the rest of the world to prevent transmission of the virus. A similar system was used at the Beijing Winter Olympics to isolate event staff from the public.

The facilities, which are operated by General Motors as part of a joint venture with Chinese state-owned automaker SAIC Motor Corp. (600104.SS)We produce Buick, Chevrolet and Cadillac cars. The facilities are located in areas east of Shanghai’s Huangpu River which have been closed from Monday to Friday.

contingency plans

GM, which said Monday that its Shanghai joint venture is producing normally, declined to comment on arrangements at its plant. A company spokesperson said the company and its joint ventures have developed contingency plans and are implementing them with its suppliers to mitigate COVID-19 uncertainty. SAIC had no immediate comment.

SAIC-GM’s ability to keep production lines running in Shanghai contrasts with that of Tesla Inc (TSLA.O)Which Reuters reported has halted production for four days. One of the sources said that the company was not able to secure enough provisions for its workers to achieve closed management. Read more

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The four sources told Reuters that workers at the affected Abtiv site were told to stay home on Wednesday and wait for further notice. Two sources said the damaged compound was produced for a joint venture between Tesla and General Motors in Shanghai with SAIC.

Aptiv’s facilities in Shanghai are located west of the city and have not been affected by the city’s lockdown, which began in the eastern regions. The sources said that workers at the affected facility were told that it had to be closed due to COVID-19 issues.

Optiv declined to comment on the suspension of production. “I can confirm that we are following all government orders and not affecting customer production,” an Aptiv spokesperson said. Tesla, General Motors and SAIC had no immediate comment.

TCL . company (000100.SZ) And Apple Suppliers Foxconn (2317.TW) Shenzhen Deren Electronic Co., Ltd. (002055.SZ) It was able to keep production running in southern China this month with closed-loop management after manufacturing hubs such as Shenzhen and Dongguan were subjected to similar shutdown measures. Read more

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(Reporting by Zhang Yan and Norihiko Shiroso) Additional reporting by Christoph Stitz and Ilona Weisenbach in Frankfurt, by Brenda Goh; Editing by Paul Simao, Jonathan Otis and Sam Holmes

Our criteria: Thomson Reuters Trust Principles.

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