Fiat Chrysler loses $1.9 billion in Q1, sets May 18 restart date for US plants

Cleveland, Ohio – Unable to make or sell cars in most of the world because of the COVID-19 pandemic, Fiat Chrysler Automobiles (FCA) lost $1.9 billion in Q1 2020, but it hopes to resume production soon.

As with Ford, which lost $2 billion in Q1 and projects a $5 billion loss in Q2, FCA expects numbers to get worse in the second quarter as most of the coronavirus impact came at the end of the first quarter. Losing most of April and May will translate into plummeting revenue with expenses little changed. The automaker did not predict how bad the financial results could get, but it did line up new financing and has more than $20 billion in liquidity to survive the short term.

“Throughout this unprecedented adversity, FCA's first priority has been the health and safety of its employees and communities. The pandemic has had, and continues to have, a significant impact on our operations,” FCA CEO Mike Manley said. “With our experienced leadership team and dedicated employees, I have the utmost confidence in our ability to navigate through this crisis and emerge well positioned to grow and prosper on the other side.”

In North America, the company plans to slowly restart all facilities except the Jeep Cherokee Plant in Belvidere, Illinois, on May 18. The Illinois plant is scheduled to reopen June 1. FCA’s plants in China re-opened at the end of February, and one if its Italian plants restarted production in late April. Its Latin American plants are set to restart production next week.

The United Auto Workers (UAW) has been negotiating with FCA, Ford, and General Motors (GM) on plant re-openings since facilities shut down in mid-March, and the union has been pushing to keep plants closed until it is sure that workers will be safe. Southeast Michigan is one of the hardest-hit areas by COVID-19, and several autoworkers have died from the virus.

UAW President Rory Gamble said FCA’s decision to recall workers is personal for him because some of his relatives work in those facilities. The union has been pushing for automakers to make their factories so safe that executives would feel safe sending their families to work there. FCA has not spelled out its reopening strategies, but Ford and others have said they plan to ensure safety by testing all workers’ temperatures, having workers wear masks, and spacing out entrances and exits to avoid long lines of tightly-packed people.

“We all knew this day would come. Our UAW focus and role is and will continue to be, on health and safety protocols to protect our members,” Gamble said. “My own family will be among those reporting, and my responsibility to our UAW members and my family will be consistent. We must implement and follow these guidelines and self-reporting procedures we have worked out. And the UAW will fulfill its role to continue to actively monitor and aggressively respond regarding all issues impacting the health and safety of UAW members in whatever manner may be necessary as we return to the worksite.”

Ford and GM have not yet shared restart dates, but industry watchers believe they will reopen in about two weeks when FCA does.

If FCA hits its May 18 restart date (automakers announced more aggressive return-to-work targets early in the pandemic, only to cancel them as the disease spread), it will ramp up production slowly. Manly said the company will reduce jobs-per-hour because workers will be doing new things such as cleaning work stations more frequently or leaving departments in staggered groups to ensure people aren’t crowding exits.

The automaker held a webinar last month with its suppliers to inform them of its plans and policies. FCA officials said they evaluated the entire supply base to ensure that companies are protecting workers from COVID-19 outbreaks and that they’re ready to go back into production, and they said their supply base is ready to support FCA’s assembly plants.

About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and Today's eMobility and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 20 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.

rschoenberger@gie.net