Michigan governor allows coronavirus-hit manufacturers to reopen on May 11

(Reuters) – Michigan Governor Gretchen Whitmer on Thursday said the state’s factories can reopen on May 11, removing one of the last major obstacles to North American automakers bringing thousands of laid-off employees back to work amid the coronavirus pandemic.

While reopening the manufacturing sector, Whitmer also extended her state’s stay-at-home order by about two weeks to May 28, citing a desire to avoid a second wave of COVID-19, the respiratory illness caused by the novel coronavirus.

“It’s a major step forward … to re-engage our economy safely and responsibly,” she said at a news conference. “Manufacturing is an important part of our economy.”

This week, General Motors Co (GM.N) and Fiat Chrysler Automobiles NV (FCA) (FCHA.MI) (FCAU.N) had said they were targeting resuming vehicle production in North America on May 18, but suppliers would need time to prepare ahead for that date. Ford Motor Co (F.N) said Thursday it is targeting that day too.

The governor previously extended the state’s coronavirus stay-at-home order through May 15, but had lifted restrictions for some businesses. Neighboring Ohio had allowed manufacturing to resume on Monday, putting pressure on Whitmer to follow suit.

Michigan’s shutdown had stymied efforts by the Detroit Three and rival automakers to restart vehicle assembly anywhere in the United States, because so many critical parts suppliers are based in the state.

Last week when outlining the safety measures it will institute, Ford highlighted that the auto sector accounts for 6% of U.S. economic output. More than 835,000 U.S. workers are employed in auto manufacturing, according to the U.S. Bureau of Labor Statistics.

Automakers and their suppliers already have begun gearing up for a possible resumption of work at their U.S. plants, but needed the official go-ahead from Whitmer.

Industry officials had been pressing Whitmer to allow suppliers to reopen starting May 11 so the automakers could resume operations on their target date. They also wanted the green light so they can press Mexico to open its auto sector as suppliers there are also critical for the industry restart.

If Mexico does not allow suppliers to restart, automakers will not be able to resume most U.S. production for more than a few days, auto executives said.

Ford said on Thursday it was aiming to restart work at most of its North American plants on May 18 with a lower-than-normal production rate, while parts distribution centers reopen on May 11 and parts plants operate as needed to support the plan. On Wednesday, the No. 1 U.S. automaker GM said it was aiming to reopen its North American plants on May 18, the day after smaller Italian-American rival FCA provided the same target.

The automakers’ plans were tacitly approved on Tuesday by the United Auto Workers union, which represents the Detroit automakers’ hourly U.S. plant workers. The union had previously said early May was “too soon and too risky” to restart manufacturing.

Tesla Inc (TSLA.O) Chief Executive Elon Musk said in a podcast interview released on Thursday that states’ lockdown orders were “unconstitutional” and would not hold up before the U.S. Supreme Court if challenged. He previously called the stay-at-home restrictions “fascist.”

Under Whitmer’s new order, factories must adopt measures to protect workers, including daily entry screening, no-touch temperature screening as soon as possible and use of protective gear like face masks. Automakers have already rolled out such policies.

Whitmer, a Democrat, has come under pressure from some Michigan residents and Republican lawmakers to ease her lockdown of the state to prevent the spread of COVID-19. She has emphasized a phased approach to reopening the state, addressing regions and businesses that are less affected or better protected.

Whitmer has been mentioned as a potential running mate for presumptive Democratic presidential nominee Joe Biden and has been a target of criticism from Republican President Donald Trump.

Michigan, which Trump narrowly won in 2016, is considered a crucial swing state in the November presidential election and the state’s COVID-19 infections rank among the highest in the country. As of Thursday, Michigan had more than 45,600 COVID-19 cases and 4,343 deaths, but state officials have said the rate of infection has slowed.