Virus-Fearing Workers Lead to Cratered Global Factory Output

(Bloomberg) -- Philippe Petitcolin has had a hard time getting workers back on the factory floor.

The Safran SA chief executive officer’s efforts to resume work at sites building jet engines for Airbus SE hit a wall after the company handed over its entire stock of 60,000 masks to plug French hospital shortages, and it lacked thermometers to test staff for possible coronavirus infections. Employees in outbreak hot spots like eastern France were reluctant to return to assembly lines, especially without protective gear.

“Workers are scared,” Petitcolin said. “On the one hand people are told to remain in confinement, and on the other we are asking them to come to work. This isn’t easy.”

That scenario is playing out worldwide -- from Safran and BMW AG to Ford Motor Co. -- as global infections cross 1 million, and companies and governments try to strike a fine balance between confinement and productivity. Workers remain wary as countries impose strict lockdowns, while also urging some of them to return to work to avert a total collapse of the economy.

Already, mass factory shutdowns in Europe and Asia have cratered manufacturing, which posted one of the grimmest months on record in March, as the virus wreaked havoc on supply chains. Manufacturing activity measures dropped sharply, with some at their lowest since the financial crisis more than a decade ago.

With average output and new orders shrinking the most in 11 years in Germany, France and Italy, pressure is building to try and kick start the machine. On Wednesday, Chancellor Angela Merkel and German auto-industry officials grappled with how and when to restart the country’s sprawling factory network as concerns intensified that some cash-strapped suppliers may not survive the damage from the pandemic.

Debate over whether work sites should resume is also raging in the U.S., where Ford and Fiat Chrysler Automobiles NV have drawn heated language from the United Auto Workers union. On Tuesday, Ford canceled plans to reopen factories in Mexico and the U.S. over the next two weeks, citing risks to workers.

Virus-related protests have hit Amazon.com Inc., with employees at a New York warehouse walking off the job to demand more cleaning and protection as coronavirus cases have popped up in the company’s 800,000-strong workforce.

“Associates are afraid to come to work; associates are getting sick; it’s been scary, very scary,” Chris Smalls, the leader of the walkout Monday at the company’s Staten Island, New York, warehouse, said in a television interview. Smalls was fired after the protest, and unions have called for his reinstatement.

In Europe, Amazon has faced similar concerns. “We’ve been confronted with fears that have been expressed,” Frederic Duval, head of Amazon France, said on RTL radio Friday, adding the company is “constantly improving” procedures.

All employees will be equipped with masks if they request them, and starting Monday Amazon will be taking workers’ temperatures at the entry to the company’s sites, he said.

Restarting safely will challenge factory managers across the globe in coming weeks and months as economies try to shake off the coronavirus shutdown.

In Europe, companies like Safran, Fiat, Michelin, Peugeot maker PSA Group, and Airbus are trying to put in place measures to secure work sites for staff, some of which could require significant changes to existing set ups.

“Strategies are needed that can link production resumption with further containment of the epidemic,” Clemens Fuest, president of Germany’s IFO Institute for Economic Research think tank said by email after BMW, Volkswagen AG and Daimler AG shut down production operations for several weeks.

BMW has talked about specific spacing between workers, while Airbus has put in place strict measures at plants that includes separate shifts, smaller teams and takeaway canteen food. The planemaker has restarted a plant in Toulouse, while Spanish operations are still on hold except for the production of 3D-printed hospital visors at some sites.

Tire-maker Michelin is gradually and partially restarting some factory operations in France, Germany and Italy this week after shutting down most activities in Europe, the U.S. and Canada. The priority is to make tires for farm vehicles and ambulances, according to a spokesman, with measures including keeping workers far apart.

PSA has extended the halt of its European factories indefinitely until it works out a health protocol with unions and experts that will include the wearing of masks, hourly washing of work surfaces, keeping doors open so handles stay clean and three-hour intervals between hand-to-hand exchanges of parts.

“At the heart of car factories, we work shoulder-to-shoulder, face-to-face,” said Jean-Pierre Mercier, spokesman for the CGT union at PSA. “Vehicles aren’t essential, and workers would be better off observing the policy of maximum isolation at home.”

The Geneva-based World Health Organization has made a series of recommendations on how employers can secure work places during the virus outbreak, including frequent disinfecting and hand-washing stations for employees. At the top of the list is getting people to work remotely, something that isn’t possible for many factory operations.

A look at what’s happening in China may provide some idea of what’s to come for companies in Europe, where the outbreak still hasn’t peaked in many countries. As the lockdown is gradually lifted in Wuhan, where the virus originated, factories are restarting in other Chinese regions, although many under strict conditions with workers wearing masks and having their temperatures monitored.

For Safran’s CEO Petitcolin, meanwhile, getting everyone back on assembly lines may be some ways away. About 10% of the company’s sites are currently completely shuttered, mostly in the U.S. and India. After it procured some masks and hand sanitizer, about 15% of workers have returned to its industrial sites in France.

“We don’t want to stop our production lines,” Petitcolin said. “If Airbus continues to work, then as engine makers, and if health rules allow, we want to meet demand.”

©2020 Bloomberg L.P.