Massive winter storm idles automotive plants, affects dealers

As a freak winter storm wreaks havoc across a huge swath of the United States, automotive manufacturers in several states have been forced to idle production lines. Factories for several carmakers including General Motors, Toyota, Ford, and Nissan have been affected due to weather conditions that have been setting records for cold and precipitation.

Around 2.8 million Texans are without power as officials are telling customers to prepare for to be without electricity through Wednesday, and potentially longer. Louisiana has experienced enormous amounts of rainfall and freezing rain that could further disrupt the electrical grid.

Plants affected by gas and electricity outages

In Claycomo, Mo., one of the plants producing the Ford F-150 has been closed for the duration of the week with the intention to ensure natural gas is available for the community, including those who work at the plant. A spokesperson for Ford Motor Company said the closure is “to ensure we minimize our use of natural gas that is critical to people’s homes.” The plant that staffs 7,300 people is expected to resume operations on Monday with union workers paid 75% of their gross pay during the closure.

On Monday, Nissan closed four US plants and canceled shifts on Tuesday with the hopes of resuming production on Tuesday night. Although unaffected by the natural gas shortage, the winter weather caused General Motors, Toyota, and Honda to cancel multiple shifts in factories in several states.

Auto retail affected directly

Senior vice president at Group 1 Automotive, Pete Delongchamps, detailed the dealer group’s experience to the NY Times. Based in Houston, many of Group 1’s dealerships in Texas and Oklahoma have been shuttered to ride out the storm, and that’s likely to continue for cleanup.

He says, “Our office doesn’t have power. Dallas is snowed in. Oklahoma is snowed in. Houston is icy.” The executive is at home, making the best of the situation despite outages for both power and water. “It’s blankets and water jugs.”

The stormy conditions have affected virtually all dealerships in the storm region similarly. The National Weather Service predicts the wild weather is expected to continue with record-low temperatures, ice storms, and potential for tornadic activity. Many of the state involved – Texas, Mississippi, Kentucky, and Oklahoma, for example – aren’t exposed to this degree of winter weather often, if ever.

A spike in business is coming

The weather is expected to return to more normal conditions starting on the weekend. Once streets are cleared, power is restored, and the ice has subsided, dealers will likely see a spike in business. Tens of thousands of motorists have been in collisions in the past few days, and Group 1’s Delongchamps expects those owners will be seeking out repair shops. “We will probably see a pickup in body shop business and repairs, from people whose cars got banged up or frozen.”

Along with the repair business, replacement cars will be a priority for motorists once their insurers get through a backlog of claims. In the coming weeks, the winter storm could drive car sales to a frenzied pace once again. That’s bound to be a story to watch as manufacturers are likely to have fallen even further behind on production due to unexpectedly idling production this week.

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