As government urges social distancing, BMW moves up closure date to March 29
Editors note: Moments after The Greenville News posted this story Wednesday morning, BMW Manufacturing issued a statement at 8:26 a.m.:
The coronavirus pandemic has resulted in a very dynamic situation. We’ve had to adjust our plans accordingly. Shelter-in-place orders in individual states have disrupted the supply chain sooner than anticipated. Consequently, BMW Plant Spartanburg will close for a two-week period beginning Sunday, March 29, through Sunday, April 12. We will continue to monitor the ongoing situation very closely and adjust our plans as circumstances dictate.
The cranes are still moving in downtown Greenville.
You can still pay your taxes at County Square.
And, at least until next week, the production lines at auto suppliers around the Upstate are still rolling.
Amid an outbreak of COVID-19 that South Carolina's top epidemiologist said Monday is in its "acceleration phase," Gov. Henry McMaster is leaving the decision to stay open — even among operations housing hundreds of workers — up to individual employers.
For the Upstate's largest and most influential employer, BMW, that has meant monitoring supply chains and customer orders and continuing to have workers come in as long as it made sense economically — while also instituting rules and procedures for social distancing and hygiene. Last week, the company said lighter car orders were behind a decision to close April 3. On Wednesday morning, the company cited a disruption to its supply chain in a decision to move up its closure, this time to March 29.
"We will continue to monitor the ongoing situation very closely and adjust our plans as circumstances dictate," the statement said.
At stake is not only a public health emergency but also the state's economy and the financial stability of tens of thousands of people. The Darla Moore School of Business at University of South Carolina six years ago estimated the direct and indirect annual economic impact of BMW alone at $16.6 billion.
"As we have said from the beginning, as the situation progresses, all those contingencies and plans are in place if they become necessary," McMaster spokesman Brian Symmes said Monday of a potential statewide "shelter in place" order. "At this time, by way of not issuing such an order, he's determined it's not necessary."
Click here for our guide:Coronavirus in South Carolina
In practice — in the Greenville area and throughout the state — social distancing therefore means different things to different people.
As of Tuesday, public schools have been shut down for another month, affecting tens of thousands of educators and students around the state. Greenville's mayor shut down the city's landmark Falls Park downtown after he heard reports of people clustering there over the weekend. The CDC continues to urge gatherings of no more than 10 people and South Carolina's governor has issued an executive order for deputies to break up public gatherings of more than three people.
- Falls Park to close:Curfew for Downtown Greenville to begin Wednesday
- Groups of 3 or more:Greenville sheriff does not intend to strictly enforce
But 11,000 people still report to work everyday at the BMW plant in Spartanburg County.
Georgia Tech Professor Pinar Keskinocak, director of the university's Center for Health and Humanitarian Systems, said the shortage of tests means the United States is fighting COVID-19 blind. At the same time, she said, the U.S. is seeking a delicate balance among multiple competing priorities and interdependent factors.
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If manufacturing falters, so too might the supply chain of materials critical to maintaining the nation's healthcare systems, she said. She said she does not think the U.S. is at the point of needing to stop everything.
"I would like to emphasize the tremendous importance of social distancing and putting public health first," Keskinocak said. "Essential services such as food, healthcare, manufacturing of medical supplies and pharmaceuticals, logistics to deliver essential goods and services, etcetera, will hopefully continue, while considering the safety of the workers, and implementing additional measures for protection as needed."
Some employers scale back or close
In states that do have shut-down orders, not all businesses close. In Indiana, where the governor on Monday shut down all "non-essential" operations, a ZF plant that supplies parts for commercial vehicles such as tractor trailers, key to the nation's logistics infrastructure, is still running, Detroit-based ZF spokesman Tony Sapienza said Monday.
Similarly, in Anderson County, where Timken shut down most of its bearings production last week, some employees who have defense-related jobs will continue working, officials told an Independent Mail reporter.
South Carolina employers that The News contacted for this story said as one that they are disinfecting common areas, requiring social distancing, canceling meetings and urging impeccable hygiene and hand-washing throughout the day. And they are staying open as long as they can.
This includes two South Carolina employers — Boeing and Magna — who have had associates test positive for COVID-19 this past week and who have carried on with production after a thorough cleaning and sending potentially exposed workers home for quarantine.
Anderson County Administrator Rusty Burns said he has seen a "mixed bag" of responses among employers to the COVID-19 outbreak.
"I know there have been several facilities that have temporarily closed, and I know others are looking at that scenario." Burns said. "I know others are concerned about making sure their employees have work. We also know that some factories are downsizing, and we also know that some are going to two week layoffs."
It's tricky, he said, because of the downstream and upstream effect on suppliers and customers.
He said about half of the people who normally work at Anderson County's administrative buildings downtown are working from home. Similarly, Greenville's County Square — which normally has about 400 administrative staff — has sent home about 100 people, said County Council Chairman Butch Kirven.
"When the governor issued his emergency order," Kriven said, "it said all local government services should continue."
BMW shutdown has ripple effects throughout Upstate
The German automaker announced last week that it would keep going until April 3, and its main suppliers — large local parts makers such as ZF, Magna and Dräxlmaier — said they would follow suit. On Wednesday morning, BMW announced it was moving up that closure date to March 29, with hopes of reopening on April 13.
Shelter in place orders in various states have, BMW said, "disrupted the supply chain sooner than anticipated." The company said it would "continue to monitor the ongoing situation very closely and adjust our plans as circumstances dictate."
Suppliers told The News they provide materials "just in time" to BMW, which has limited warehousing. This means that when assembly stops there, it stops at suppliers, too. It also means that so long as the customer — BMW — needs parts, the supplier keeps its lines open.
"Everything is 'just in sequence' and 'just in time' so there would be kind of like a trickle down effect. It's usually that way," Dräxlmaier spokesman Ralph Schwarz told The News last week. "The customer stops. We stop, too."
Laura Moody, regional manager for staffing firm Hire Dynamics, told The News that many suppliers in the region are ramping up production right now in anticipation of BMW's shutdown. Hire Dynamics, which typically had about 4,000 people on its weekly payroll before the coronavirus crisis, works heavily with manufacturing and distribution in the Upstate, Moody said.
"We will look for available positions for our talent once they do shutdown," Moody said. "That will be a big hit for the Upstate."
Logistics, packaging, medical supply and food manufacturing companies, Moody said, are very busy. Her firm rapidly changed its procedures this week in response to social distancing advisories, she said. Applicants are interviewed online now and the federal government last week suspended the in-person requirement for citizenship verification. Employers can now temporarily review documents online.
"I'm not saying we are able to place everybody," Moody said, "but we are placing a lot of folks."
Market demand leads COVID response
BMW's statement last week that it would temporarily suspend production attributed the decision in equal parts to the "health and protection of our associates" and to "the major impact on the global demand for cars that the corona pandemic is having."
► BMW's FULL STATEMENT ON MARCH 20: The health and protection of our associates is our top priority. At the same time, the dynamic development of the corona pandemic is having a major impact on the global demand for cars. BMW Manufacturing is taking a flexible approach and adjusting our production volumes accordingly. On April 3, we will shut down production at Plant Spartanburg in South Carolina. The production break is expected to last until April 19th.
Similarly, bearings manufacturer Timken confirmed Tuesday that it had suspended production temporarily at its Honea Path facility because of declining to demand from customers.
"We are staying in close contact with our customers and supply chain so that we’re prepared to increase production as soon as business returns to more normal levels." company spokesman Scott Schroeder said in an email to the Independent Mail.