Coronavirus COVID-19 Automotive News 4/9

In Coronavirus COVID-19 news are Rivian, CarMax, Kia, Volkswagen, GM, Shift, Erie Insurance and Huyndai.

Rivian has shut down its facilities and pushed back the date it expects to deliver its vehicles until 2021.

CarMax Cuts & Furloughs

CarMax announced it will furlough 15,500 employees plus the pay of CEO Bill Nash has been cut in half. Furloughed employees who are part of the CarMax medical plan will have portion paid by CarMax.

Kia Donates More

As part of the brand’s ongoing response to the COVID-19 health crisis, Kia Motors America (KMA) today announced a total donation of $1 million to multiple non-profit partners that assist homeless youth nationwide, including Covenant House, StandUp for Kids and Family Promise1. The $1 million donation will help homeless youth in all 50 states receive much needed shelter and care in an effort to help fight the spread of COVID-19.

– Recognizing that the COVID-19 crisis has altered driving patterns, resulting in fewer accidents and claims, Mercury Insurance today announced the company would be giving back 15% of monthly auto insurance premiums to customers in April and May. Subject to regulatory approval, the company will automatically credit customers’ accounts, providing much needed relief during this time. The Mercury Giveback program applies to personal auto policyholders in the 11 states in which they operate.

Nationwide Refunds $50

Due to the hardship households are experiencing as a result of the COVID-19 pandemic, Nationwide announced today it is offering a one-time premium refund of $50 per policy for personal auto policies active as of March 31, 2020.  The goal is to get relief in the hands of customers quickly and simply.

The refund is equivalent to an average savings of 15 percent for two months and is on top of existing discounts customers already earn. It will be returned to customers in the last form of payment they have made, whether electronic or paper. The refund will arrive in the next 30 days, subject to individual state regulatory approval.

To provide support for impacted communities, the Nationwide Foundation made $5 million in contributions to local and national charities to support pandemic response efforts.

Erie Insurance Cuts Rates in 12 States

To continue providing support and financial relief to customers impacted by the coronavirus pandemic, Erie Insurance today announced that it will reduce rates for personal and commercial auto insurance customers in 12 states and the District of Columbia.

Once approved and implemented, the estimated amount of financial relief for Erie Insurance customers is estimated to be approximately $200 million.

According to Erie Insurance President and CEO Tim NeCastro, while ERIE’s pricing philosophy has always centered around providing exceptional protection and service at the lowest possible cost, lowering rates during this challenging time is simply the right thing to do.

“For 95 years, ERIE’s promise to our customers has remained the same: to be there when they need us most,” said NeCastro. “Now, more than ever, we are centered on the Golden Rule and committed to providing near perfect protection and near perfect service at the lowest possible cost.”

While some auto insurers this week announced short term auto insurance rebates, ERIE’s decision to lower rates is designed to offer more impactful relief to customers — now and in the future.

Pending regulatory approval, actual rate changes for customers will vary by state and also be based on individually purchased policies and coverage options. Once approved, premium adjustments will take effect at the time of new policy initiation or renewal.

Shift Offers Software

Shift, an e-commerce marketplace for buying and selling cars, today announced it is offering its proprietary software solutions to a limited number of dealership groups that may have seen a drop in sales as a result of COVID-19. The company is looking to work with dealership groups that have multiple stores either shut down or operations significantly impacted by the nation-wide social distancing orders.

Shift has spent the past several years developing proprietary systems that enable no-contact, fully online sales of used cars, both with and without a test drive. Like most traditional auto dealers and manufacturers, Shift believes that test drives remain crucial to the customer’s purchase, and has created a unique, patent-pending way to deliver these test drives to their location. In addition, Shift enables online transactions as well as offline transactions using a custom-built mobile point of sale application on an iPad. All transactions come complete with e-contracting technology, digital DMV title transfer, and the full spectrum of F&I products.

VW Furloughs

As the COVID-19 public health crisis deepens, Volkswagen Chattanooga today announced temporary emergency furloughs for its production and maintenance workforce effective April 11. These employees have been unable to work following the factory’s production suspension, which began March 21 to help prevent the further spread of the coronavirus.

“Our primary objective is to protect the financial health of Volkswagen for the benefit of our team as we address the emerging and ongoing impacts of the COVID-19 outbreak on our industry,” said Tom du Plessis, president and CEO of Volkswagen Chattanooga. “Right now we have limited visibility on when we will be able to resume production, but we are committed to doing everything we can to preserve jobs. During this time we will be intensely focused on preparing to reopen in a responsible way, ensuring our team has the opportunity to return to work safely and as quickly as practicable.”

Volkswagen is taking steps to limit the furlough’s impact on employees, which is expected to last no more than four weeks. During this time, the Company will continue to provide health care benefits and coverage of premiums, paying both employer and employee contributions. Employees will still receive their first quarter bonuses as well as their March monthly bonuses.

With the recent enhancement of unemployment benefits under the CARES Act, these employees are now eligible to receive an additional $600 per week in federal compensation through the $2 trillion economic stimulus bill, as well as state unemployment benefits.

All furloughed employees will remain Volkswagen employees through the duration of the furlough period. Upon return, employees will retain their original dates of hire and accrued paid time off.

Non-furloughed employees will continue working from home and will use one mandatory vacation day next week. All employees have been asked to self-quarantine and maintain social distancing as directed by the Centers for Disease Control and Prevention.

Those enrolled in Volkswagen’s apprenticeship and high school programs will have continued access to education. All instructor-led technical training are on hold until further notice.

The factory suspended production last month prior to stay-at-home mandates from state and local government out of an abundance of caution. Volkswagen employees and production contractors received full pay and benefits during this time , for a total of three additional weeks of compensation.

GM Increases Face Mask Production and Share MMA

Based on the overwhelming number of requests for face masks for frontline workers, GM is increasing its production capacity for face masks at its Warren, Michigan facility. In addition, the company has shared its manufacturing plans with GM suppliers along with the Original Equipment Suppliers Association and the Michigan Manufacturers Association to help other manufacturers ramp up their own production efforts.

In response to the COVID-19 pandemic, GM is currently producing face masks Warren and in China through a joint venture with SAIC-GM-Wuling. Studies are underway to launch similar initiatives in other countries.

The Warren facility can now produce up to 1.5 million face masks a month. Coordinating with the State of Michigan’s Michigan Community Service Commission, GM’s site in Warren has already delivered face masks to local hospitals. Over the weekend, the site will add two additional production lines: a second line for face masks and a new line for filtering facepiece respirators.

For U.S. production, the company partnered with existing automotive suppliers to provide the materials and equipment necessary for mask production.

JR Automation in Holland, Michigan and Esys Automation in Auburn Hills typically provide GM with automotive-manufacturing equipment. For GM’s face-mask production, the company built a mask line that automatically folds, welds, and cuts face masks.

GDC in Goshen, Indiana provides GM with sound-deadening insulation found in vehicle doors, headliners and trunks. To transition to making materials for GM’s face mask production, GDC enlisted the help of OXCO in Fort Mill, South Carolina. Both companies’ employees worked around the clock and over weekends to alter their production processes for the manufacturing of three layers of fabric used to manufacture masks.

Hyundai Continues to Idle

Hyundai Motor Manufacturing Alabama (HMMA) will continue to idle automobile production in Montgomery, Alabama, through May 1, 2020. Production is expected to resume on Monday, May 4, 2020.

HMMA has decided to continue to suspend vehicle production to protect the health and well-being of our team members, their families and communities. HMMA employees will continue to receive full medical, dental and vision benefits during this production interruption. Team members may also use their paid vacation time or leave during this period.

HMMA’s top priority is the safety and well-being of our employees. We have developed enhanced procedures to sanitize workspaces for our approximately 3,000 team members.  We are taking proactive steps to pre-screen for elevated temperatures; ensure physical distancing guidelines throughout our facilities; expand cleaning protocols and increase distribution of health and safety materials.

Alabama Governor Kay Ivey issued a stay-at-home order until April 30, 2020. HMMA team members and their families are encouraged to respect the order and follow Centers for Disease Control and Alabama Department of Public Health protocols for reducing the spread of the COVID-19 virus.

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