Toyota, Tesla Among Other Automakers Closing Factories Due To Coronavirus
The Coronavirus is making global headlines as people evacuate China, the origin of the virus. Along with mandatory evacuations, the Chinese government is requiring some companies to close their doors. The virus is thought to have originated in Wuhan, a key industrial hub for the Chinese auto and steel industries.
Tesla’s newest Gigafactory based in Shanghai, China is one of the companies affected. The factory will be closing its doors according to company CFO Zach Kirkhorn.
Tesla’s finance chief announced that the closure could “slightly” impact company profitability for the first quarter. Kirkhorn said, “At this point we’re expecting a one, to one and a half week-delay in the ramp of the Shanghai build Model 3 due to a government required factory shutdown. This may slightly impact profitability for the quarter, but is limited as the profit contribution from Model 3 Shanghai remains in the early stages.”
And other automakers in the region are following suit. Toyota has also announced it will idle production across all production facilities in China. While GM, Ford, FCA, and Volkswagen are not shutting down factories, they are implementing travel restrictions for their employees, which includes temporarily preventing non-critical travel to mainland China. Nissan and Honda have implemented similar restrictions.