The auto industry would be wise to never forget the lessons of a year marked by the pandemic.
It was in March 2020 that COVID-19 began to upend daily life in Canada and much of the world. The auto industry was no exception. In early spring, North American manufacturing faced a two-month shutdown, and dealers had to suddenly adjust to new health protocols and stay-at-home orders.
In many ways, the Canadian auto industry has proved itself to be quite resilient. The protocols developed by carmakers, suppliers and unions to safely reopen factories across the country have managed to keep assembly lines running. Despite inventory challenges and customer reluctance to visit dealerships, sales rebounded in the second half of 2020, exceeding levels that many analysts had feared at the height of the pandemic.
The industry still has a long way to go before it can put the pandemic behind it, but the proverbial light at the end of the tunnel is growing brighter. However slow the vaccine rollout has been in Canada and however worrying new strains of the coronavirus are, those vaccines still provide plenty of hope that the pandemic will soon end.
An eventual return to normal life is obviously welcome. But once we get to that point, auto industry executives, dealers and labour leaders cannot let the lessons of the past year collect dust on a shelf.
For starters, the pandemic should always serve as a reminder of the importance of local supply chains. The industry has been thrown for a loop in recent months thanks to a microchip shortage stemming from higher-than-expected demand, competition from other industries and trade policy. Automakers are competing for chips alongside companies that produce electronics such as smartphones, laptops and game consoles.
Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association, told me in January that the Detroit Three were “looking at their supply chains” in a bid to avoid similar situations in the future. That’s smart. But it’s an issue that should be at the forefront of executives’ minds even in calmer times.
Once the microchip shortage is addressed, diversifying the supply chain might fall off the priority list. The industry should avoid that.
I also hope the industry remembers how well open lines of communication served them during the pandemic. Automakers, unions, suppliers and competitors engaged in an unprecedented level of collaboration. Companies frequently shared tips and best practices with each other. Given the complexity of supply chains, such teamwork was necessary to ensure the resumption of manufacturing. It also served as an example of what the industry can accomplish when it harnesses its collective brainpower.
Unfortunately, future crises are inevitable. Hopefully, the next one will not be as devastating as the pandemic, but a crisis is coming. When it arrives, the industry should look to how it reacted to COVID-19 as a template for surviving and thriving during challenging times.
