GM’s shut down its plants in Brazil as the pandemic is now taking hold in the region.
General Motors Co. and Toyota Motor Co. now plan to shutter plants in Brazil into June in response to the spread of the COVID-19 virus across South America.
Toyota said it was suspending auto production at its Brazil plants until at least June 22. GM also expects to resume production in the same month.
The spread of the virus across South America has forced automakers to shut down production throughout the region.
(GM cutting executive pay, deferring salaried compensation.)
Stretching out the South American shutdown into June also could be indicator of carmakers’ thinking as they face the challenge of restarting plants in North America and Europe where the death toll from the lethal virus has been far higher. However, the financial impact of a prolonged shutdown reaching into the summer is also significantly greater.
Brazil is one of the most competitive markets in the world and global companies such as Fiat Chrysler and Volkswagen AG have yet to announce when they expect to resume production there.
GM’s plants in Brazil have been shuttered since March 23. On March 30, the company put its workers on furlough, but kept their pay intact as it made employees use up vacation days.
(GM taps credit lines to guard against virus impact.)
As it stands now, GM plans to keep its Brazilian factories shut down for at least 60 more days due to the coronavirus crisis, the company said recently, as the final batch of unionized workers voted on the automaker’s proposal.
As the pandemic has upended the global economy and holiday allotments have dried up, GM has explored more drastic measures in South America’s top auto producing country. Now its factories in Brazil, where for several years Chevrolet has been the country’s best-selling brand, will be shut down until mid-June, according to the company’s announcement.
The timeline puts Brazil behind the schedules set by automakers in Europe, where companies have said they might begin building vehicles by the end of this month.
(Toyota extends shutdown while Nissan, Tesla furlough employees.)
In the United States, automakers including Fiat Chrysler Automobiles and Toyota are hoping to restart production in early May. However, the start times could easily slip.