Tesla and Detroit carmakers get green light to reopen plants

Michigan and California’s governors are allowing manufacturers to open up factories in the coming days, delivering a boost to Tesla and Detroit’s three carmakers.

California Governor Gavin Newsom will let manufacturers resume operations starting Friday, while Michigan’s Gretchen Whitmer cleared the way for them to reopen beginning May 11. Ford on Thursday joined General Motors and Fiat Chrysler in scheduling the restart of North American plants for May 18.

“We’re not out of the woods yet, but this is an important step forward,” Whitmer said in a statement. “This is good news for our state, our businesses, and our working families.”

Whitmer’s decision clears the way for parts suppliers to start running their assembly lines to support vehicle plants resuming production later this month. Newson’s announcement elicited a cheer from Tesla CEO Elon Musk, who has sharply criticised shutdown orders.

Michigan is providing clear guidance for auto companies, component makers and factory workers after weeks of uncertainty about the timing. Most auto output ground to a halt in mid-March to slow the spread of the coronavirus and brace for a slump in car demand from homebound consumers.

Losing just two weeks of production cost General Motors US$600 million in cash in the first quarter, and carmakers have been borrowing money to tide them over during a shutdown likely to hurt second-quarter earnings even more.