There is a dramatic and growing glut of new and used automobiles, but the auto industry's problems started before the coronavirus.
Cheap and available credit, low unemployment rates, and healthy consumer sentiment all contributed to U.S. auto sales in 2019 -- which already began to see a downturn.
“U.S. auto sales declined in 2019 as major automakers posted a weak finish to the year and American consumers continued to favor trucks and SUVs over cars," according to an S&P Global Market Intelligence analysis.
SEE SLIDES BELOW: 7 Major Coronavirus Developments — The Growing Auto Problem — May 2, 2020
"Nonseasonally adjusted passenger car sales in the U.S. for 2019 declined 10.9% to 4.7 million units, versus 5.3 million units in 2018. Sales of trucks, minivans and SUVs for the year totaled 12.2 million units, up 2.8% from the 2018 figure of 11.9 million units," S&P continued.
Now, the coronavirus has thrust the industry into further turmoil.
Bloomberg reports, "There are gluts of all shapes and kinds forming in the U.S. nowadays, a testament to the scope of the economic pain the coronavirus is inflicting. Slaughterhouses are killing and tossing out thousands of pigs a day, dairy farmers are pouring away milk, oil sellers were paying buyers to take barrels off their hands last week, and now, brand-new cars are being left adrift at sea for days."
Rhode Island Implications
For Rhode Island, the implications go beyond the dealers' lots. Quonset-Davisville is one of the largest auto import ports in America. As of October 18 of last year, 242,568 automobiles had been imported in 2019, up from 241,851 in all of 2018.
In December, Quonset announced, "Rhode Island voters approved $50 million, as part of a $70 million bond measure in 2016 for the rehabilitation of Pier 2 at the Port of Davisville. The Pier, known as the “workhorse” of Davisville, handles all incoming heavy cargo including automobiles, wind turbine components, as well as any sea shipments for the Park’s companies. Pier 2 construction is on pace to be completed in early 2020, and will enable the Port to continue its record-breaking auto import business."
"For the auto industry, the crisis has left cars gathering dust on dealer lots, dealerships shuttered, auction prices slipping and tens of thousands of workers laid off or furloughed. April U.S. sales plummeted 54% for Toyota Motor Corp., 47% for Subaru Corp. and 39% for Hyundai Motor Co," according to Bloomberg.
“Dealers aren’t really accepting cars and fleet sales are down because rental-car and fleet operators aren’t taking delivery either,” said John Felitto, a senior vice president for the U.S. unit of Norwegian shipping company Wallenius Wilhelmsen. “This is different from anything we’ve seen before. Everyone is full to the brim.”
Related Slideshow: 7 Major Coronavirus Developments — May 2, 2020
If you think you are headed to one of the state parks soon, well not so fast. Governor Gina Raimondo's administration has outlined a very slow re-opening of parks and beaches and limited access.
DEM announced Friday, "Rhode Island Department of Environmental Management (DEM) will be reopening state parks in a graduated manner during the first phase of reopening Rhode Island’s economy.
While DEM will be staggering park openings, reducing the size of parking areas and restricting hours of operation and activities to prevent crowds, many diverse and varied outdoor spaces will be open for Rhode Islanders to safely enjoy while adhering to public health guidance on gathering and social distancing.
DEM hopes to reopen all parks by the end of May. A second phase will involve the saltwater beaches. DEM’s announcement is available online."
The numbers from the Department of Labor and Training unveil that more Rhode Islanders have now filed for unemployment insurance, temporary disability insurance and “gig economy” benefits than are working.
The total number that has filed now stands at 270,541.
The number of workers impacted comprises more than half of the total workforce in Rhode Island.
Rhode Island was especially hard hit as so many Rhode Islanders work in hospitality and retail -- two industries nearly completely shuttered during the pandemic.
"What about Rhode Island recovering by the end of 2020? The industries most affected by the COVID crisis are sadly among the most important in Rhode Island: tourism, hospitality and travel," said URI Economist Len Lardaro.
"Not only have these been severely hurt, with future restrictions on numbers of persons allowed publicly and changes in personal preferences for travel and tourism, these will recover far more slowly than most now believe," he added.
On Friday, the CDC kicked off the SARS-CoV-2 Sequencing for Public Health Emergency Response, Epidemiology and Surveillance (SPHERES) consortium, which will greatly expand the use of whole genome sequencing (WGS) of the COVID-19 virus.
This national network of sequencing laboratories will speed the release of SARS-CoV-2 sequence data into the public domain for research.
SPHERES will provide consistent, real-time sequence data to the public health response teams investigating cases and clusters of COVID-19 across the country. It will help them better understand how the virus is spreading, both nationally and in their local communities. Better data, in turn, will help public health officials interrupt chains of transmission, prevent new cases of illness, and protect and save lives.
“The U.S. is the world’s leader in advanced rapid genome sequencing. This coordinated effort across our public, private, clinical, and academic public health laboratories will play a vital role in understanding the transmission, evolution, and treatment of SARS-CoV-2. I am confident that our finest, most skilled minds are working together to help us save lives today and tomorrow,” said CDC Director Robert Redfield, M.D.
Tracking the COVID-19 virus as it evolves
Genomic sequence data can give unprecedented insight into the biology of SARS-CoV-2, the virus that causes COVID-19, and help define the changing landscape of the pandemic. By sequencing viruses from across the United States, CDC and other public health authorities can monitor important changes in the virus and use this information to guide contact tracing, public health mitigation efforts, and infection control strategies.
Some sports are still announcing cancelations. The Newport Gulls season is canceled.
The New England Collegiate Baseball League (NECBL) has announced that the summer baseball league off this year. But, other leagues are. trying to develop strategies to resume play.
"Amid mounting economic pressure for sports to resume — with everything from eight-figure player salaries to stadium workers’ minimum-wage paychecks hanging in the balance — American leagues have considered a variety of options, but every possibility presents obstacles, many currently insurmountable.
Interviews with league and union officials across the United States’ major sports revealed no league is prepared to cancel its suspended season, but with the clock ticking — in a normal year, the playoffs would be underway in the NBA and NHL — none are close to announcing definitive return-to-play plans, either. League officials have mulled adjusting schedules, realigning divisions, staging games at neutral sites and sheltering an entire league while isolating players in a single city. But as state restrictions change and the understanding of the virus evolves, no option has risen above the speculative," reports the Washington Post.
EDITOR'S NOTE: Raimondo does not allow Rhode Islanders to hear reporters' questions. Nearly all governors across the country and the White House allow reporters to ask questions directly and for the public to hear the questions and the responses.
