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| Virus Exposes Cracks in Carmakers’ Chinese Supply Chains | Virus Exposes Cracks in Carmakers’ Chinese Supply Chains |
| (7 days later) | |
| The coronavirus is providing a lesson in how much the world’s car factories revolve around China. | The coronavirus is providing a lesson in how much the world’s car factories revolve around China. |
| Hyundai, the world’s fifth-largest automaker, said Tuesday that it was temporarily stopping production lines at its factories in South Korea because of shortages of Chinese parts. | Hyundai, the world’s fifth-largest automaker, said Tuesday that it was temporarily stopping production lines at its factories in South Korea because of shortages of Chinese parts. |
| The Hyundai shutdowns — the first factory lines to be idled outside China — could portend much more serious disruptions in the complex networks that supply automakers with essential components and materials. | The Hyundai shutdowns — the first factory lines to be idled outside China — could portend much more serious disruptions in the complex networks that supply automakers with essential components and materials. |
| Hyundai “decided to suspend its production lines from operating at its plants in Korea,” the company said in a statement. “The decision is due to disruptions in the supply of parts resulting from the coronavirus outbreak in China.” | Hyundai “decided to suspend its production lines from operating at its plants in Korea,” the company said in a statement. “The decision is due to disruptions in the supply of parts resulting from the coronavirus outbreak in China.” |
| President Trump’s trade war notwithstanding, the global economy remains highly interconnected and interdependent. Supply chains are finely tuned to deliver parts just as they are needed, so companies don’t need to waste money on big warehouses. | President Trump’s trade war notwithstanding, the global economy remains highly interconnected and interdependent. Supply chains are finely tuned to deliver parts just as they are needed, so companies don’t need to waste money on big warehouses. |
| The systems are efficient, but also vulnerable. The coronavirus is testing these supply chains in ways they have never been tested before. | The systems are efficient, but also vulnerable. The coronavirus is testing these supply chains in ways they have never been tested before. |
| Automakers are especially susceptible to interruptions in the flow of goods because the industry is global, and cars are complex products with many precision parts. The scope of the damage is impossible to measure, because no one knows how long the coronavirus emergency will last and how bad it will get. | Automakers are especially susceptible to interruptions in the flow of goods because the industry is global, and cars are complex products with many precision parts. The scope of the damage is impossible to measure, because no one knows how long the coronavirus emergency will last and how bad it will get. |
| So far, factory closings have not affected the production of autos and parts in North America, where almost all vehicles include at least some Chinese components. | So far, factory closings have not affected the production of autos and parts in North America, where almost all vehicles include at least some Chinese components. |
| Many manufacturers have inventories of parts to use or expect new shipments that left China before the outbreak, said Dan Hearsch, a managing director in the automotive and industrial practice at AlixPartners. | Many manufacturers have inventories of parts to use or expect new shipments that left China before the outbreak, said Dan Hearsch, a managing director in the automotive and industrial practice at AlixPartners. |
| “Everybody planned to be down for a week, but nobody planned to be down for a month,” he said. “The manufacturers are concerned about depleting their inventory of parts, but the question is how long is it going to go on? If it becomes six weeks, eight weeks, 10 weeks, that’s a real problem.” | “Everybody planned to be down for a week, but nobody planned to be down for a month,” he said. “The manufacturers are concerned about depleting their inventory of parts, but the question is how long is it going to go on? If it becomes six weeks, eight weeks, 10 weeks, that’s a real problem.” |
| In China, many auto plants have already shut down because of the virus, including factories run by Hyundai, Tesla, Ford and Nissan. Companies like Volkswagen, Daimler and Continental, a German supplier of electronics and other components, said they planned to reopen their factories in China next week if they received government authorization. | In China, many auto plants have already shut down because of the virus, including factories run by Hyundai, Tesla, Ford and Nissan. Companies like Volkswagen, Daimler and Continental, a German supplier of electronics and other components, said they planned to reopen their factories in China next week if they received government authorization. |
| “The supply chain is on track to be fully functional in time for start of production, and planned deliveries to customers remain unchanged,” Volkswagen said in a statement. Ford, which has two joint ventures in China, plans to resume production there early next week, a spokesman said. | “The supply chain is on track to be fully functional in time for start of production, and planned deliveries to customers remain unchanged,” Volkswagen said in a statement. Ford, which has two joint ventures in China, plans to resume production there early next week, a spokesman said. |
| But in the meantime, companies are paying workers to stay home and maintaining idle factories. The closings could last beyond next week if the virus spreads further and the death toll rises. | But in the meantime, companies are paying workers to stay home and maintaining idle factories. The closings could last beyond next week if the virus spreads further and the death toll rises. |
| “It’s simply too early to comment on the impact,” Ford’s chief executive, Jim Hackett, told analysts on an earnings call on Tuesday. “It will take weeks to understand the implications of the outbreak.” | “It’s simply too early to comment on the impact,” Ford’s chief executive, Jim Hackett, told analysts on an earnings call on Tuesday. “It will take weeks to understand the implications of the outbreak.” |
| The extra costs and lost sales hit the auto industry at an especially bad time. Sales in the United States, Europe and China slumped last year because of trade tensions, and the industry is in the midst of a costly shift to electric cars with autonomous driving technology. | The extra costs and lost sales hit the auto industry at an especially bad time. Sales in the United States, Europe and China slumped last year because of trade tensions, and the industry is in the midst of a costly shift to electric cars with autonomous driving technology. |
| Daimler issued a profit warning last month, citing legal costs in the United States and other jurisdictions where the authorities are investigating possible emissions cheating. | Daimler issued a profit warning last month, citing legal costs in the United States and other jurisdictions where the authorities are investigating possible emissions cheating. |
| The virus has also demonstrated how much automakers have come to depend on China for sales and growth. China has become the biggest car market by far and until recently the most dynamic. But even before the virus hit, an economic slowdown in China had depressed sales. | The virus has also demonstrated how much automakers have come to depend on China for sales and growth. China has become the biggest car market by far and until recently the most dynamic. But even before the virus hit, an economic slowdown in China had depressed sales. |
| German carmakers are particularly sensitive to what happens in China. Volkswagen sells more cars there than anywhere else, and it is also a critical market for BMW and Daimler, the maker of Mercedes-Benz cars. | German carmakers are particularly sensitive to what happens in China. Volkswagen sells more cars there than anywhere else, and it is also a critical market for BMW and Daimler, the maker of Mercedes-Benz cars. |
| “The biggest problem in Wuhan is that nobody is buying a car,” said Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen who follows the auto industry. “The Germans have the biggest risk portfolio in China.” | “The biggest problem in Wuhan is that nobody is buying a car,” said Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen who follows the auto industry. “The Germans have the biggest risk portfolio in China.” |
| Updated July 7, 2020 | |
| The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization. | |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| European automakers and suppliers surveyed Tuesday said they were not experiencing disruptions to factories outside China, but acknowledged that the situation could change. | European automakers and suppliers surveyed Tuesday said they were not experiencing disruptions to factories outside China, but acknowledged that the situation could change. |
| “We are watching closely, but at the moment there are no effects,” said Saskia Essbauer, a spokeswoman for BMW. “Currently supplies are assured.” | “We are watching closely, but at the moment there are no effects,” said Saskia Essbauer, a spokeswoman for BMW. “Currently supplies are assured.” |
| A spokeswoman for the French carmaker Renault, Rié Yamane, said in an email: “At this stage we have no impact but the supply chain teams are closely studying the subject.” | A spokeswoman for the French carmaker Renault, Rié Yamane, said in an email: “At this stage we have no impact but the supply chain teams are closely studying the subject.” |
| And Hyundai “is reviewing various measures to minimize the disruption of its operations, including seeking alternative suppliers in other regions,” a spokesman said via email. The company said suspension schedules would vary by assembly line. | And Hyundai “is reviewing various measures to minimize the disruption of its operations, including seeking alternative suppliers in other regions,” a spokesman said via email. The company said suspension schedules would vary by assembly line. |
| Hyundai and its affiliated automaker, Kia, produced 7.2 million cars last year. Hyundai has a worldwide network of factories, including plants in Russia, Turkey, the Czech Republic and Montgomery, Ala., which can probably make up for lost production in South Korea. | Hyundai and its affiliated automaker, Kia, produced 7.2 million cars last year. Hyundai has a worldwide network of factories, including plants in Russia, Turkey, the Czech Republic and Montgomery, Ala., which can probably make up for lost production in South Korea. |
| But the longer that Chinese factories remain shut, the greater the risk that shortages will affect other manufacturers. | But the longer that Chinese factories remain shut, the greater the risk that shortages will affect other manufacturers. |
| Auto parts frequently imported from China include wheels, suspension systems including shock absorbers, and electronic components. | Auto parts frequently imported from China include wheels, suspension systems including shock absorbers, and electronic components. |
| A handful of vehicles are produced in China and exported to the United States. They include the Buick Envision from General Motors, a sport utility vehicle. The Ford ExoSport, which is made in India with about 15 percent of its parts coming from China, is also sold in the American market. | A handful of vehicles are produced in China and exported to the United States. They include the Buick Envision from General Motors, a sport utility vehicle. The Ford ExoSport, which is made in India with about 15 percent of its parts coming from China, is also sold in the American market. |