Automakers, Suppliers Battle Shanghai Shutdown

A COVID-19 outbreak in Shanghai prompted a two-phase lockdown in the city of over 26 million people. The lockdown is part of China’s “zero-COVID” strategy and it is throwing a curveball at automakers and suppliers.

Subsequent actions began with electric vehicle maker Tesla suspending production at its Shanghai plant for four days, according to two sources. Some manufacturers are following suit, while others attempt to adapt so production can continue. 

Sources said General Motors’ joint venture in Shanghai kept production running but, in order to do so, requested its employees sleep on factory floors and work in isolation. Reuters reports the company was also able to get passes for its trucks to continue deliveries.

General Motors’ facilities run as part of a joint venture with SAIC Motor Corp, a Chinese state-owned automaker, and produce Chevrolet, Buick and Cadillac vehicles. A General Motors spokesperson said it developed contingency plans with its suppliers to minimize uncertainty.

A source said Tesla called in workers the day before the lockdown began and attempted to form closed-loop management to continue production. But unlike General Motors, Tesla could not obtain sufficient provisions and then sent home the employees. 

Another auto supplier, Germany’s Bosch, announced its two Shanghai plants are operating with reduced personnel. 

Sources added Aptiv PLC, a supplier for Tesla and General Motors’ Shanghai joint venture, instructed its workers at a facility to go home on the second day of the lockdown in an effort to enforce COVID protocols. The order came despite the facilities not technically being affected by the city’s lockdown.