BREAKING NEWS: Mercedes-Benz plant in Hungary also suspends production
German carmaker Daimler announced on Tuesday that due to the worsening situation of the COVID-19 pandemic, it is suspending production in the majority of its European plants, initially for two weeks.
THE SUSPENSION APPLIES TO DAIMLER’S CAR, VAN AND COMMERCIAL VEHICLE PLANTS IN EUROPE AND WILL START THIS WEEK.
It also said that an assessment of global supply chains drove Daimler to the conclusion that these currently cannot be maintained to their full extent.
Given the ongoing spread of COVID-19, the economic effects on Daimler cannot be adequately determined or reliably quantified at this time.
The decision to shut down plants is a precautionary measure to contain the spread of the coronavirus and protect the workforce, Daimler said in a statement.
Although the move was most likely to affect the operation in Kecskemét, it was only a speculatio until now.
The plant said in a statement today that
the decision does affect the Mercedes-Benz factory in kecskemét, as well, and as of monday at the latest it plans to suspend production for two weeks.
The company said it is taking the necessary steps to protect is associates, prevent further infections and curb the spread of COVID-19. Those that can will be working from home come Monday, and those that cannot and who need to stay home with their children were offered to take a leave this week.
For the duration of the suspended production the company will adhere to the working time as per the collective agreement, and for some part of this period we order a collective obligatory leave. This is how we ensure even in this period the salaries of the workers of the Kecskemét plant.
If you feel the above statement does not make it entirely clear who will be on leave for how long and who will get paid, we don't blame you.
Automotive sector screeches to a halt in Hungary
Due to challenges posed by the spread of COVID-19, local vehicle producers are putting production on hold. The first one to go was the Audi plant in Győr, then Suzuki first announced the scrapping of its afternoon shift and a bit later its complete shutdown.
The automotive sector (vehicle production) has a massive weight in the Hungarian economy, contributing more than a quarter of the volume of industrial production and about 5% of the country's GDP. Due to the exposure of supply chains to the global pandemic and the virus-related demand shock the sector has been at risk from the very beginning of the COVID-19 outbreak. The risk of disrupted operations has been hanging over Audi's head for some time now.The most recent developments prove those fears correct. The suspension of production in Győr, Esztergom and Kecskemét can deal a severe blow to the Hungarian economy. The key question is, of course,
whether the plants will remain inert for a few weeks or even longer.
We estimate that a single month of full stop in the three factories could lower Hungary's annual average GDP by 0.4 percentage points.
Mercedes plant order books were full
Similarly to the Audi plant in Győr, the Kecskemét-based Mercedes-Benz factory is to go on a forced leave while being on a great run. The last few years were all about the SUV segment on global car markets, and the compact models Mercedes manufactures in Hungary also remain highly popular. CEO Christian Wolff said back in February that due to the robust sales in the compact segment
tHE PRODUCTION PROGRAMME OF THE MERCEDES-BENZ PLANT IN KECSKEMÉT IS ALREADY BRIMMING FOR 2020 AND THEY ARE MANUFACTURING AT FULL CAPACITY.
In view of such optimism, we estimated that output could be once again roughly around 190,000 cars in Kecskemét this year.
