Auto ETFs Rally Despite Increasing Covid-19 Concerns | ETF Trends

The auto industry is one of a number of industries that is suffering due to employees missing work, as the coronavirus continues to ravage the nation. As a result, automakers are looking at alternatives to ensure that staffing needs are met and production goals can be maintained. Auto ETFs are pushing off the news for the time being, however.

Ford Motor and Fiat Chrysler, which have experienced issues with staff illness, are now hiring temporary workers to fill the gaps, while GM is restructuring shifts at an assembly plant in Missouri as the auto industry struggles to maintain factories despite widespread illness in assembly workers.

The issue has become a significant problem, as enough employees are unable to work due to self-quarantine restrictions or actual symptoms of the coronavirus, that it’s causing major issues for production lines at plants in high risk states like Michigan, Missouri, and Kentucky.  Automakers are already struggling to play catch up as a result of losses after a roughly two month shut down from March to mid-May.

“It’s incredibly damaging to the economy and to the industry and to the companies to shut down again,” said Kristin Dziczek, vice president of Industry, Labor & Economics at the Center for Automotive Research in Ann Arbor, Michigan.

U.S.-based automakers, like GM and Tesla, are scrambling to keep plants functioning as well as possible while preserving safety guidelines and handling staff issues. Each company is handling things in its own way.

Tesla’s vice president of Environment, Health, and Safety, Laurie Shelby, sent an e-mail to all Tesla employees on July 15th mitigating the effect of coronavirus exposure risk at work and citing outside exposure as the cause of the majority of infections among Tesla’s staff.

“Most of the positive cases resulted from an individual living with or traveling with someone with Covid-19 and have returned to work after recovering from home,” she told employees. “To beat this pandemic, we must all remember what we do off work impacts what we do at work.”

General Motors spokesman Dan Flores said that GM has had to rearrange furlough plans to accommodate all the people out on sick leave in Missouri.

“Even with very effective safety protocols in place, it has been a challenge to accommodate people who are not reporting to work due to concerns about COVID-19 in the community and keep our Wentzville plant operating at full capacity,” Flores said Thursday in an email. “But the team worked very hard on a new staffing plan that will keep everyone working and hopefully avoid the need to lay-off the third shift.”

The First Trust Nasdaq Transportation ETF(FTXR), which has a healthy 8% allocation of General Motors is up 0.81% amid the news, while the auto-centric First Trust Nasdaq Global Auto Index Fund (CARZ), also with considerable GM holding, is also climbing just over 1% today, apparently unfazed by the concerns currently.

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