Auto Industry idling their plants
Starting with tonight's shifts looks like the North American auto industry is following Europe's lead and idling their plants
https://techcrunch.com/2020/03/18/gm-ford-fca-to-close-all-factories-ap-reports/
I don't blame them... It's safer for their employees, and saves on the cost of running the plants (energy, HVAC, etc) aside from payroll. I'm sure the UAW is picking up some of the pay. It also reduces the inventory stockpile because nobody is buying anything right now. That saves dealers money for the purchase of new inventory and in insurance costs.
Auto suppliers will be following suit...going to hurt alot of their hourly workers who aren't union and will not have an income until they return to work...whenever that is.
Michigan is loosening up unemployment benefits to cover people who normally wouldn't be covered which is good to hear...hopefully they can expedite payments. Many of the hourly people in these factories live paycheck to paycheck and they will be suffering hardship almost immediately.
Glad to hear about the state opening up unemployment requirements. That is the main focus of the various spending bills in Congress right now, also. If the two sides can ever agree on something, they better do it quick!
It's a lot easier when your workers make the decision for you and just walk out. They would still be open if it wasn't for that.
Not sure why you're getting downvoted. I'm a union auto worker and you're exactly right. Hell they didn't even shutdown because it was the right thing to do. They closed because most get their aluminum from Mexico and Mexico closed the border on their end. Local 845.
Well, this has been another sunny day.
the beatings will continue until moral improves
We truly do need a moral improvement...
Some silver lining, hopefully this will benefit our carbon footprint.
I did read about Chinese pollution clouds dissipating while this occurs, and that leading to tens to hundreds of thousand of fewer early deaths due to air quality. Number seems high, but any incidental benefit is certainly welcome.
There was an interesting health study done during the Bejing olympucs when they shut down most of the car traffic. It showed some pretty impressive changes in biological markers associated with air pollution. It is easy to see if you reduced pollution levels long term it having a significant impact, seems harder to believe if it is just a short term change.
Because climate policy work is a big part of my job, it is hard not to think about this a bit. This would be my quick thoughts:
Because the climate challenge is a long term problem, short term blips in carbon dioxide emissions are not going to have much impact. Further, the short term economic impacts as well as the fact that even after we get through with the worst of this, there will likely be alot of public policy focus on being better prepared for the next pandemic, probably means less focus on climate policy..
I do have hopes that when we have the bandwidth, there is some good that could come of this. First, maybe it will create greater comfort with telecommuting, hopefully reducing vehicle emissions. Second maybe it will make companies rethink the amount of travel they do and if it is all neccesary reducing airline emissions. Third, maybe it will make people more comfortable with what scientists have to say about climate risks.
while I think it is a huge problem we need to tackle and time is important, given the magnitude of the short term challenges we face on both a health and economic front, I do generally think the time to try to act on any good that can come from this is not until after we get through the huge challenges in front of us today.
"A Georgia hospital has begun making makeshift masks from surgical sheeting as they risk running out of supplies due to increased worldwide demand for medical equipment."
This is something I'd expect to hear out of Guatemala or Bangladesh or Zimbabwe, not out of a 21st century industrial state that likes to see itself as being the wealthiest and most technologically advanced country in the world.
I mean we shifted all production overseas to....gee, I wonder where:
https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html
When your dependent on a shit hole called China, then yeah our stuff runs out.
Maybe we will fix that going forward.
Always going to be tough to compete with cheap shipping and rock bottom labor prices overseas for commodities. Not an easy problem to solve
Mexico?
Like Hatter said yesterday, fuck the stock price.
Start bringing industry home.
I'm almost glad this is happening, if only to expose our massive strategic vulnerabilities. For far too long we have cared only about shareholder profits over everything else.
Will things cost more if they're made here? Yes. But we will all be making more money to afford them. And we won't be at any other countries mercy when things go south.
Imagine if we had to go to war with China. They knock out our power grid, and we moved all our electrical equipment manufacturers over there.
We would be fucked.
Will things cost more if they're made here? Yes.
The dirty little secret is, not by much.
For example, if Apple can sell a 99 cent part for 19.99, there's no reason industry cannot bring it back home for $1.99 per part.
I don't begrudge CEOs for getting paid the way the do but there's no fucking reason to offshore it so they can make $25MM/year. Bring it home make $20MM/year and put the $5MM into labor.
It's not really that hard.
Is there a point at which keeping industries open is worth the greater risk of illness and death? I realize it sounds heartless, but what is the endgame here? Shutting down the economy indefinitely?
Its about giving our health care systems a shot. If we let this run wild not only would the death rate from COVID be bad but if you get into a car crash, have a stroke, a heart attack, etc. you would also be fucked. It obviously can't last forever but we can flatten the curve with 6-8 weeks of social distancing we can save thousands of lives. Just look at the fatality rate of SK, who has had the virus longer, and Italy. Its a massive swing.
For the record SK's basketball league is going to be starting up again next month
Italy also has an older population and SK has been doing more testing and as a result has probably unearthed more mild cases. My point is this thing is complex and social distancing is just one factor impacting mortality rates.
I'm not saying this to you specifically, or trying to be a dick, but those pointing to Italy are completely misinformed.
Let me explain why:
1. All of the date to date reflects that if a person under 70 who is in relatively good health contracts this disease, they are exceedingly unlikely to die. By contrast, the mortality rates among those over 70 or those with compromised immune systems is very high. Said differently, this disease is deadly for the old or sick, but not for the young and healthy.
2. Italy's has one of the oldest mean and median ages in the world (I believe second in both). by contrast, South Korea has one of the younger populations (the difference is more than 6 years in median age, which is huge). A disease they preys upon the old is going to have a drastically different impact upon an old population than a young population.
3. Again using the fatalities in Italy, almost every fatality are among the old or sick. From a CNN article (please, no politics, because the data is the data): "In Italy, 90% of the more than 1,000 deaths occur in those 70 or older" Another article on bloomberg has more detailed statistics: "The average age of those who’ve died from the virus in Italy is 79.5." Only 50 of the more than 2500 deaths occurred in people under 50 years old, and of those, almost all had significant preexisting health issues (Bloomberg article: "More than 99% of Italy’s coronavirus fatalities were people who suffered from previous medical conditions").
Even within the US, almost every single one of the 125 deaths has been someone who is elderly or who has a compromised immune or respiratory system.
With that data in mind (and the South Korea fatality statistics are similar), the response of locking down the country, crippling the economy, costing millions their jobs and retirements and destroying day to day life for just about everyone seems unnecessary. We know who is most vulnerable. A more common sense approach might be to institute some form of quarantine for those at risk, without shutting down the world.
All of the date to date reflects that if a person under 70 who is in relatively good health contracts this disease, they are exceedingly unlikely to die.
In France, while most of the COVID-19-related deaths are indeed seniors, half of the patients in critical condition are under the age of 60. Don't think that this disease can't mess you up pretty bad. People have this idea that if you're younger, you're in the clear, with just "flu symptoms." That's not necessarily the case.
(And we're not a terribly healthy country, unfortunately. A lot of Americans have co-morbidities that put them at elevated risk even if they're not seniors.)
The problem with Italy isn't that their health system sucks or that their people are too old, it's that they just had too many critical patients coming in at the same time. It's pretty basic math : if you have x number of ventilators and x + 2 patients arrive, well, two patients are going to suffer. Given the infection rate of this virus, it's going to be really hard to keep our patients at x and not go over. To give our hospital system a chance, we have to try to flatten the curve.
This was going to cause massive economic havoc no matter what we did. See my other comment in this thread. Every affected government has realized this and has adopted a flatten-the-curve strategy. You just can't have massive hospitalizations/fatalities every day and conduct business as usual.
Being younger doesn't necessarily mean you are okay, but it really probably does.
As for politicians actions, what would you do? Risk it? Or be able to take credit when it isn't as bad as predicted because you were proactive? There is no political motivation to do anything other than take this too seriously.
While you can more or less predict that a person under 70 won't die, you can't predict for sure that they won't be hospitalized. This is not a "totally fine or dead" dichotomy, there are a lot of patients in between. Article:
A new CDC analysis of more than 2,400 cases of COVID-19 that have occurred in the United States in the last month shows that at least 1 in 7 and perhaps as many as 1 in 5 people between the ages of 20 and 44 who contract the virus require hospitalization, a level exponentially higher than the hospitalization rates for influenza.
As for politicians, yeah, they want to be seen as having done something. But we also have three case examples (Wuhan, Iran, Italy) already of how bad this can get, so there is reason for them to take these steps.
The economy is f*cked no matter what. Either the crash happens now or it happens a month from now when the death toll is far higher. Keeping businesses just means shutting them in four weeks because costumer traffic will collapse due to the outbreak.
I'm as ignorant of what it's actually like inside an auto plant as anybody on this board. Just out of curiosity, how dense is it in terms of employees relative to other work environments such as a typical office? I know it's not like the old days of assembly lines where people are practically shoulder to shoulder along a conveyor belt anymore, but in a space as big as a football field, how many people are we talking about working at one time?
Put another way, how easy/hard would it be for an autoworker to keep at least 6 feet away from co-workers?
Distance is an issue but the biggest problem, imo, is contaminated surfaces being touched by many people...vehicles on the assembly lines themselves, shared tools, machine controls, etc.
Certainly there are close interactions, but it's actually not that dense. The real struggle hear is that nobody is buying cars, so dealer's have stopped purchasing. If the automakers kept producing, they'd just fill lots with inventory that wouldn't ever be sold. Inventory that sits too long ends up as damaged goods, eventually.
If there is too much inventory... incentives will increase.
It would not be so much the work environment, as people are relatively spread out during their shift. It is the common areas (break rooms, bathrooms, time card stations, etc.) and their myriad of hard surfaces that many workers from multiple shifts come into contact with everyday.
General Assembly workers are practically on top of each other and share tools. You'd have to cut 50-75% of the workforce in order to keep 6 feet apart, as there are often 4 people in each station.
Body shop workers are far apart. You can't have one without the other, however. Not for very long, at least.
Someone's going to post : "See? This is an overreaction to the virus, think about the economy!"
But if we just let the coronavirus run wild and kill 2 million Americans . . . I've got news for you, folks aren't going to be rushing to buy cars then.
I’d like to understand this point better. US has ~330M people, so you’re saying if if 2M died (disproportionately older, fixed income, less likely to buy new cars) then the other 328M would no longer need or want to buy cars? I’m just tying to understand your argument here. Certainly 2M deaths would negatively impact the economy, but you’re saying It would rival the damage of shutting down all discretionary consumer spending and increasing unemployment by an order of magnitude? Do you have a link to back that claim up?
Fear is very, very bad for consumer confidence. If you can't trust that a place is safe to go, you don't go there. If you hear of a pandemic raging in your country (475 people died of this in Italy today, the proportional equivalent of 2000 Americans) - it's not going to make you want to go out and shop.
The measures that we are taking now - closing stores, restaurants - were going to happen on their own over the coming weeks as customer traffic was going to collapse. We just ripped the bandaid off now. The stock market crash of March 2020 would have just been the crash of April 2020 otherwise.
2M deaths from COVID-19 probably means like 4-5M total deaths, because people will still die of all kinds of other causes and all rates will go up due to the collapse of our health system in this scenario. Fear of catching the virus would definitely make a lot of people shut-ins, with or without government order.
There would still be some tough guys who kept on going out and shopping - enough to keep fueling the pandemic, but not enough to keep businesses healthy.
Beyond all that, you can't experience that kind of loss (combined with government inaction) without experiencing major social breakdown. Trust in public institutions would collapse. You would probably be looking at a lot of rioting.
None of that would be good for your business or for the stock market. We need to find a way to get this virus under control, that is Job 1.
I'm all for social distancing, flattening the curve, etc. and 100% prioritize that over the economy so please don't take this wrong, but also trying to play devil's advocate here....
Flattening the curve will help our health care systems be able to treat more patients, more effectively by reducing the peak demand for ventilators, ICU beds, etc. It will save lives...... But from a purely economic standpoint, wouldn't a cold-hearted approach with no social distancing, a more sudden spike in the virus, and yes, more deaths and severe illnesses, be less impactful on the economy than effectively shutting down the economy for several months? While it's clearly not the right thing to do, I guess I can't wrap my arms around why a complete shutdown for several months could possibly be better economically-speaking. The whole fear argument goes out the window, because much of the fear is caused by shutting down the economy, social distancing, etc. If we didn't do that, many Americans would carry on in sweet, ignorant bliss until their loved ones passed away.
I think the do nothing case might not be as rosy as you suggest. If hospitals get over run that will impact us all. It is hard not to see that not leading to some response.
The challenge in even trying to calculate the cost of the counterfactual because as I noted above, it is hard to see it truly be do nothing.
But from a purely economic standpoint, wouldn't a cold-hearted approach with no social distancing, a more sudden spike in the virus, and yes, more deaths and severe illnesses, be less impactful on the economy than effectively shutting down the economy for several months?
Only if we are a nation of daredevils who refuse to let daily death tolls in the thousands or the fear of infection affect our spending/investing habits in the least. (And if our labor force can somehow cope with tens of millions being hospitalized.)
In reality no, this pandemic was guaranteed to wreak massive havoc on our economy once it broke containment.
US has ~330M people
Yes, that's total people.
A more applicable sample size is there are 217.8 MM people in the US over 18.
Then subtract:
- older
- income prevents a new purchase
- city dwellers who don't require private transportation
- preference
2 million dead is an absolutely absurd number. That’s not going to happen.
Even if you ramp up Italy’s cases from the current 31k up to 200,000, you’re looking at a .8% infection rate. Take that to the US and you get roughly 2.8M infections. Then use Italy’s worst case 8% death rate (which, come on, ours won’t be 8%) and you get 224,000 deaths. Yes, a lot, but an order of magnitude lower than 2 million.
numbers like 2M getting thrown out is straight fear mongering and not based on any kind of logical reasoning or fact . In order to reach 2M deaths we’d have to have an infection rate of 15%!!! And a death rate of 4%. 15% Infection is impossibly high and 4% death rate is very high.
if Italy gets to 5,000,000 infections/400,000 deaths, let me know.
But it's not all or nothing.
We can all agree that COVID-19 creates a health risk, and if unchecked, has the potential to cause a significant number of deaths.
I hope that we can all agree that a crashing economy also has the potential to cause a significant number of deaths. Massive unemployment leads to homelessness (or living below the poverty line), mental health issues, etc, but also, results in less tax dollars for the state and local government to provide services to those most in need.
The trick is balancing these two competing interests. Let's apply what we know about the disease to see if there is a balance that addresses both:
1. We know from data out of Italy, S. Korea and China (unreliable, but consistent with all other countries) - as well as out of the US so far - that the overwhelming number of deaths occur in those over 70, or those with SERIOUS underlying health conditions.
2. We also know that healthy individuals below 70 have a fatality risk that is no different than that of the flu. There have been zero deaths in the US of healthy individuals under 70. There have been almost zero such deaths out of South Korea or Italy, either.
With this is mind, there is no debate that we need to protect those over 70 (and perhaps even over 65 to be safe) and those with certain known underlying conditions (asthma, COPD, emphasema, heart conditions) and compromised immune systems from the disease. But, do we need to shut down the whole country to protect what amounts to approximately 25% of the population? I think that this is why there are calls of "overreaction."
To be clear, I agree with the general concept of a short term national shut down. That should have started this past Friday or the Friday before that (I use a Friday because then a 2-week shutdown gets you 16 days, which is more than the known incubation period of COVID-19). The two week period would significantly slow the spread of the disease, allow a few weeks for the country to marshal resources to deal with areas of outbreak and allow science a bit more time to figure out if existing treatments for other diseases might work (there are a few very promising treatments being used in trials already). After that, though, I think that we need to balance our competing interests and re-open the country in full, with the following limitations:
1. No international travel. China is experiencing a second wave of the virus because of people coming in from other countries. The border remains fully closed until this shit is under control. Hurts the economy but worth the trade-off.
2. Those who are at risk would be directed to self isolate. For nursing home patients, retirement communities or other senior living, that would mean no visitation, and those who work in those facilities would need to agree to isolate for a few weeks, as well.
3. Hospitals would need to be set up such that there are wings for the sick (which would have the same types of restrictions as the senior living and nursing home) and wings for daily life. There would also need to be dedicated COVID-19 hospitals in communities that need it, or at least COVID-19 wings.
4. Then there are the tougher situations. Grandkids who live in the same home as grandparents or sick relatives, etc. Those would require case by case planning.
But, we cannot shut down the world for the equivalent of a month or more.
A couple of key questions with your approach:
1. What is the percentage of the US adult population at risk - you suggested 25%. This study suggests 41%. https://www.kff.org/global-health-policy/issue-brief/how-many-adults-are-at-risk-of-serious-illness-if-infected-with-coronavirus/ I have to say I was shocked by how big this number was, I can imagine there are reasonable lower estimates out there.
2. What additional percentage is caring for these people - healthcare workers are 11% of the workforce. Since you won’t need all of the healthcare workers, but you will need other people (custodial staff, maintenance, food services), I’m going to throw out something in the mid single digits. 4%.
3. What percentage of the 41% lives with other people not in category 1. About 27% of the 41% in 1 is 18 to 59. I’ll guess half of them live with someone else (no justification - just round number for illustrative purpose. That is about 5% of the adult population. Do the people who have to quarantine move out, are we creating quarantine hotels? Or do we quarantine an additional 5% of the population bringing the quarantine numbers up to nearly 50% of the population?
4. what happens to the kids of al the people in 2 and 3?
Ultimately I understand your point that the economic impact would be less, but is it even feasible?
I think when this is all over, there will be lots of studies done about alternatives like the one you suggest, but I think it would be incredibly challenging logistically without more planning. Unfortunately the answer may ultimately be that it was much easier to use the blunt approach.
I think this suggests that a much more aggressive effort to get a testing program in place quickly and isolate people who have it would be well worth it.
The Connecticut Labor Department saw unemployment benefit claims jump 900 percent over four days, from a norm of 3,000 or so filings in a typical week ending Friday to nearly 30,000 on Tuesday.
I read something similar about Colorado the day after Vail and Alterra announced they were shutting down for the winter (except for - possibly- a handful of resorts in the spring).
Spring skiing is gone now too. Season is over for everyone. Which is a bummer... we were looking at June and July groomers at ABasin and Loveland.
What is going to happen, especially with all the great snow were are still getting, is all the transplants are going to head into the backcountry without having the proper skills and equipment -- happened on Jones Pass last year south of Winter Park.
I predict the number of search and rescue calls will increase as ill equipped people put themselves in bad positions.
Remember how Detroit became the Arsenal of Democracy in WW2?
Why can't somebody step up and do the same thing for medical equipment and supplies? All you keep hearing about is inadequate testing and flattening the curve, but wouldn't it be more prudent to assume everyone gets it, and just start producing beds, masks, and ventilators accordingly?
It feels like a war mobilization effort is required.