The COVID 19 crisis has unearthed vulnerabilities to Auto manufacturers particularly as social distancing rules have hampered production facilities. The governments in the US and Europe have softened the blow by offering furloughing staff for a period of time. Auto manufacturers know this stipend of help won't last and eventually, they will have to shoulder their staff or cut jobs. As is the case of JLR who are set to cut 2,200 jobs.
What the COVID 19 crisis has done among other things is to highlight key vulnerabilities and potential remedies. Smart manufacturing has been a dance with the devil for governments, it posses a huge threat of unemployment, yet it spurs efficiency to production. However, the COVID crisis has the government in the palm of Auto manufacturing lobby groups where the argument of grants, R&D reliefs and benefits for smart manufacturing can be heard attentively. The same can also be said for the farming industry which found itself in a position to argue that pickers aught to be grandfathered out in replacement of machines.
Nation-states have almost always championed, supported and bailed out auto manufacturers as they were always seen as ways to train and employ a significant amount of people whilst also producing exports. If you think about Detroit, which was built and flourished off of Auto manufacturing yet had succumbed to a failed city which filed for Bankruptcy in 2013. The truth is Auto manufacturers, particularly in the US would trim operating costs by standing up factories in Mexico and Canada. When Donald Trump came to power in 2016 he stipulated that those car manufacturers should and would have to bring back manufacturing to the US in order to put people back in jobs. Trump's protectionism would soon see manufacturers fall in line and revitalise the US car manufacturing employment scene.
The Government would not want to sell the tractor to buy the farm
The looming worry over the governments is that if this pandemic becomes perennial; how to withstand manufacturing whilst protecting its health care capacity. The Government would not want to sell the tractor to buy the farm so to speak by mandating employees to return to jobs and then causing huge health care deficits as new health facilities have to be erected to support growing health care needs. The lesser of the evils would be to help manufacturers not be dependant on human workers, but support humans working in remote roles whilst machines carry out operations that would have likely been done by humans in close proximity.
Although there is a race to find a vaccine for COVID 19 the implications of it have revealed PTSD through statewide policy. Not to mention other state actors who are using this vulnerability in order to steal or spread disinformation in order to create confusion. As far as the governments are concerned smart manufacturing would produce a new way of doing business in the Auto Manufacturing world and employment of that sector would have to shift to other sectors, and for Auto manufacturers? a new search for smart manufacturing acquisitions would be tabled.