Reopening Automotive Supply Chains Across the United States Requires Coordination Strategy

As the American government plans to start reopening the U.S. economy in May, many companies have begun to question whether Mexico and Canada will be on the same time schedule.

Manufacturers in chemicals and electronics have suppliers across both borders. The automotive industry is not immune to the same structure. Much of the uncertainty revolves around Mexico, which has taken a stricter approach than the U.S. and Canada in regards to what they consider an essential business. The lack of coordination between countries has caused chaos in many industries. Many automakers have expressed increased concerns about lack of coordination when economic activity in only one nation resumes.

On Thursday, Trump made him plans to reopen the U.S. economy well know, releasing guidelines that could allow some states and employers to resume business and work within a month.  “A national shutdown is not a sustainable long-term solution,” the president said in a briefing. “To keep vital supply chains running, these chains have to be taken care of so delicately. We must have a working economy and we want to get it back very, very quickly.”

Some larger carmakers have indicated they plan to reopen in early May. But for the auto industry in particular to get back to producing vehicles, it’s not enough to just reopen parts of or even the entire U.S. economy. Auto supply chains across North America are intertwined, so a smooth reopening may not be possible. Even in a best-case scenario in which the nations and states cooperate on the timing and scope for a reopening, the logistics will be more complicated for individual companies and plants.

Safely reopening plans requires a sufficient supply of personal protective equipment for workers, which may be a problem given shortages of gloves and masks in the U.S.  Plants in China cycled through the virus, but didn’t restart at full production immediately. More important that reopening is reopening correctly.