Detroit Free Press: Marick Masters on cost of shutdown for automotive industries
The Detroit Three are running out of time. Auto industry experts say the companies must restart their North American assembly factories in the next month as costs mount with each passing day the lines remain idle. As new-car demand pauses, the carmakers’ fixed costs carry on. “Only 5% to 8% of their costs are in labor, but it still amounts to billions across all three companies,” said Marick Masters, business professor at Wayne State University. Then there are the billions of dollars the car companies spend on future product and electric vehicle development. Those investments must continue, Masters said. “If they stay behind, as China ramps up production of EVs along with other competitors, all three will lose market share and they can’t afford to lose market share,” Masters said. “This shutdown is a situation that is intolerable for the long term and the long term is three months or longer.”
