Gestamp, Volkswagen Chattanooga's biggest local supplier with some 1,000 workers, has temporarily shut down its three factories here in the wake of the VW plant closure.
"We've shut down until our customers get back on track," said Susana Tello, Gestamp's North American communications director. "We hope that will happen very soon."
With VW and other automakers suspending production amid the coronavirus, suppliers are using steps such as paid and unpaid time off, furloughs, transfers and helping workers get jobless benefits to manage through the crisis.
Tello said that while the main concern is ensuring plant safety, Gestamp wants to hold onto its employees when production resumes, which she hoped would take place by mid-April.
"We've offered a variety of options for them," she said. Some of those include letting employees take vacation time, Tello said, noting it may be difficult to tap those days once production restarts.
Also, she said, the company that provides stamped parts for the VW plant is offering unpaid time off as well as helping workers with unemployment benefits given the enhanced federal package that has come out.
Tello said she didn't have numbers as to how many employees took which option.
"Our goal is to make sure they come back as soon as possible and keep salaries as much as possible," she said.
VW, Chattanooga's biggest manufacturing employer with 3,800 workers, announced last week that it is extending its previous week-long plant shutdown to allow more workers to stay home and limit the spread of the virus. VW plans to resume production Sunday, April 5 at 10 p.m., although the company said it will continue to monitor the growing virus and may update that schedule later.
VW's unprecedented halt to car production on both sides of the Atlantic is costing the world's largest automaker $2.2 billion per week, VW Chief Executive Officer Herbert Diess said last week. Diess said Volkswagen can endure the factory shutdowns and still pay its workers in Europe and the United States for several weeks, "but not indefinitely."
"Even for the financially strong company Volkswagen, the current exceptional situation represents an acute economic danger," he said.
The Chattanooga-based transportation, logistics and warehousing company Tranco Group, which employs upwards of 170 people doing jobs supporting the VW plant, expects to furlough around 50 people soon, said Brad Kemp, president of the company's Tranco Global operations. Those employees work at the plant moving items from trucks to the production line, he said.
"We'll have to mirror whatever VW production schedules are," he said. "We'd been paying them for the time being. We'll have to see what the [federal government's] economic package looks like."
On the driver side of the business, a certain percent had been dedicated to VW, Kemp said.
"Those drivers we have tried to repurpose in over-the-road activity," he said.
But Kemp said trying to manage employees through the crisis is a work in progress.
"Some [employees] are sitting back and trying to see 'Am I going to take time off or is it worthwhile to work over the road?"' he said. "'What does the package look like?'"
Kemp said some employees are looking to go on unemployment, noting the new package is a robust one over the next few months with an extra $600-a-week federal supplement to the state jobless benefit maximum of $275 a week in Tennessee.
He termed VW "a good partner."
"They've been communicative," Kemp said. "It's a big ship over there. You can't turn it like a small boat."
Kemp said Tranco, which has a total of between 300 and 350 workers, started 2020 at a record pace. But he said the VW closure has "certainly thrown a wrinkle in things."
He added that the trucking business is seen as an essential part of the economy, and that for-hire truckers have been "super busy." At the same time, Kemp said, warehousing is at capacity. Some VW suppliers are still shipping and need places to store goods, he said.
On Monday, VW supplier Q2 Management filed notice with the state that it temporarily would be laying off 53 people from its 8001 Volkswagen Drive operation, effective from March 21.
Q2 Management, headquartered in Greer, South Carolina, and providing inspection and containment, warehousing, engineering, consulting, and training services for companies, declined to comment.
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.