Crain's Detroit Business: John Taylor on lasting effects of COVID-19 shutdowns
The economic toll wrought by the COVID-19 outbreak is mounting. Unemployment claims are on the rise — Goldman Sachs projected that U.S. jobless claims last week would rise to 2.25 million — up from 281,000 the week prior. On Friday, University of Michigan economists predicted Michigan's unemployment rate could rise to 10 percent under a worst-case scenario, a figure last seen in October 2011 as the state was still dealing with the fallout of the Great Recession. But these projections are nothing more than educated darts in the dark. So Crain's asked local experts, such as economists, researchers and logistics executives who see firsthand the economy dry up. Here is what they said: John Taylor, chair of the department of marketing and supply chain management, Wayne State University: "This thing (shutdowns from COVID-19) lasting a couple of weeks is one thing, but if this drags out for months, a lot of (manufacturing) suppliers are going to struggle. 'Lean' is a good thing but it also counts on certainty. When you don't have certainty, (just-in-time inventory management) becomes a problem. Luckily, we have great mega-suppliers that are very strong financially. Bosch as an example. But the smaller tier-ones and others, they are going to need cash flow. Nevertheless, I don't think this will be the end of global supply chains."