Auto workers at Honda Motor Co., Nissan Motor Co. and BMW’s U.S. assembly plants are finding themselves in an unfamiliar situation as their employers furlough thousands of them with no pay because of the COVID-19 pandemic.
Those and other nonunion automakers in North America have rarely resorted to layoffs in the past few decades, except during the 2007-09 economic crisis. To avoid sending workers home with no pay, international auto companies have relied on plant expansions, new-model additions and even make-work activities to keep work forces on the clock. Many also rely on pools of temp workers that can be increased or decreased as the market warrants, without cutting into regular employee rosters.
But the new health crisis is starkly different, as the industry halts operations worldwide.
A Nissan spokeswoman said about 10,000 workers at plants in Tennessee and Mississippi were furloughed starting Monday. Nissan has suspended U.S. production through April 27.
The unpaid furloughed employees are eligible for unemployment, including newly passed enhanced unemployment benefits. They will continue to receive health insurance, the spokeswoman said.
Nissan said it expects furloughed employees to return to their current positions when the shutdown ends. Some employees essential to business operations are scheduled to work and will be paid for time worked.
Honda will begin unpaid furloughs April 13 at its assembly, engine and transmission plants in the U.S. and Canada and a powersports plant in South Carolina. The plants employ about 16,900 workers and are scheduled to be idled until May 1.
“These unprecedented circumstances require that we take some difficult actions in order to cope with the economic impact of the COVID-19 pandemic,” a Honda spokesman said. “This will include temporarily implementing No Work Available (NWA) days during the continued production suspension in our plants.”
Some workers, the Honda spokesman said, may qualify for temporary paid leave under some circumstances. But those not on company-provided leave will not be paid and will be directed to federal and state-funded benefits.
Japan’s Nikkei business newspaper reported earlier on the Nissan and Honda actions.
BMW will not pay furloughed employees at its Spartanburg, S.C., factory for the additional three weeks that the crossover assembly plant is scheduled to be shuttered. Workers will continue to receive medical benefits, a spokesman said. The German automaker initially said it would idle production at the 11,000-employee factory from March 29 through April 12. It has since extended the shutdown through April 30.