European and US Factories Shut Down One After Another...Concerns Over Global Economic Paralysis

Ford Spain Factory to Close for One Week

Fiat Chrysler Shuts Down Four Factories in Italy

GM Also Considering Factory Shutdown Next Month

Increased Risk of Finished Product Supply Disruptions

[Asia Economy Reporter Kwon Jaehee] As the novel coronavirus infection (COVID-19) spreads to Europe and the United States, global companies are beginning to implement 'shutdowns' in earnest. This is the opposite trend to China, where the situation is calming down, with production facilities and store closures being carried out in regions outside China. While production disruptions in China originated from parts supply issues, production stoppages in Europe and the U.S. could lead to finished product supply shortages. The global economic paralysis caused by the China-originated COVID-19 shock is becoming a reality.

According to major foreign media such as CNBC on the 15th (local time), global companies with production bases in Europe, including Volkswagen, Ford, and Fiat Chrysler, are considering temporarily suspending factory operations due to the spread of COVID-19. Ford will close its Valencia plant in Spain for one week starting on the 16th. This decision came after three employees at the plant tested positive for COVID-19 the previous day. Ford stated, "All employees who had contact with the confirmed cases will be quarantined, and disinfection and other measures will be carried out during the one-week closure." This plant is Ford's largest production facility outside the U.S., employing over 7,000 people annually and producing more than 400,000 vehicles.

Volkswagen also suspended operations at its Slovakia plant starting the same day after suspected COVID-19 cases were detected.

Fiat Chrysler Automobiles (FCA) has also decided to shut down four factories in Italy, where COVID-19 is spreading at the fastest rate in Europe. This preemptive measure was taken to prevent confirmed cases from occurring.

Not only Europe but the U.S. is also entering the shutdown zone. After 10 confirmed cases were reported in Michigan, the center of the U.S. automotive industry, General Motors (GM) is considering suspending operations at some plants next month. GM CEO Mary Barra said, "From the 16th, we recommend working from home whenever possible," adding, "We are adjusting work schedules for essential production, customer service, and after-sales operations." On the same day, Ford also informed its U.S. employees to work from home and announced the postponement of a new car launch event scheduled for next week.

Production disruptions at companies are expected to negatively impact sales as well. Retailers in the U.S. have already begun closing stores to prevent the spread of the virus. Apple is temporarily closing about 460 stores worldwide, excluding China. Since the U.S. and Europe account for 70% of Apple's sales, future performance outlooks are bleak. Apple CEO Tim Cook stated on the company's website on the 13th, "As confirmed COVID-19 cases continue to rise, we have decided to close Apple Stores outside of China until the 27th of this month to protect our employees and customers," adding, "The best way to reduce the risk of virus transmission is to reduce population density and practice social distancing." Cook also added, "We will continue to pay hourly workers normally during the store closures."

Nike will also close all its stores in North America, Western Europe, and New Zealand from the 16th to the 27th. Regarding this, Nike said, "The well-being of our employees and consumers is our top priority," and "We are also considering additional measures to protect employees, such as remote work and social distancing." Abercrombie & Fitch, a clothing company with about 880 stores worldwide, will close all stores globally except in the Asia-Pacific region from the 15th to the 28th, and yoga apparel brand Lululemon will suspend operations in North America and Europe from the 16th to the 27th.

Goldman Sachs stated, "Due to fears of COVID-19, consumers are continuously reducing spending, causing economic activities in countries including the U.S. to sharply decline by next month," adding, "Along with this, as supply chain disruptions worsen, the U.S. economic growth rate will inevitably be revised downward again."

This content was produced with the assistance of AI translation services.