Lear Corp., a large auto supplier in Southfield, today announced it has added capacity at its AccuMED production facility in New York, which specializes in the manufacturing of medical products, to produce protective masks to combat the COVID-19 pandemic.
Donations of masks recently were made to the Detroit Medical Center, the largest health care provider in Southeast Michigan, and the city of Detroit for use by the police and fire departments.
“We are proud to support pandemic relief efforts in the communities where we live and work,” says Ray Scott, president and CEO of Lear President and CEO Ray Scott. “Protecting hospital staff and public safety officers has never been more important as they continue to go to work every day during this crisis to help others in need.”
In February, Lear’s Mocksville, N.C., facility designed a facemask in response to a shortage of personal protective equipment in China. Lear then added production capacity for masks in less than 72 hours. With cases of COVID-19 rising in other areas of the world, the operation has expanded from three production lines to seven, and now employs 200 people. Total capacity is 25,000 units per day, based on availability of raw materials.
In addition to the donations made recently in Detroit, Lear-produced masks have been delivered to other global locations based on the employee and community need for personal protective equipment. Lear also is moving to start production at plants in Mexico and Europe to manufacture protective masks. Once fully operational, Lear will have dedicated about 1,200 workers and will have the daily global capacity to produce 125,000 masks for local communities.
Additionally, the Mocksville facility currently is designing and developing full-face shield visors for production to support the health care response to the COVID-19 pandemic.
“We are committed to making donations of personal protective equipment until this situation improves,” adds Scott.
Last week, Lear said it was instituting additional employee safety measures and enhancing the company’s financial flexibility in light of the substantial impact COVID-19 is having on the global automotive industry and the global economy more broadly.
Over the past several weeks, in response to COVID-19, Lear has implemented measures to protect the health and safety of employees globally. These actions include:
- Requiring non-essential administrative staff to work from home
- Preventing visitors from entering company buildings
- Managing shift changes and staggering lunch breaks to thoroughly disinfect common areas and promote social distancing
- Installing additional hand sanitizer dispensers and more frequently cleaning often-touched surfaces
- Adhering to safety guidelines provided by the World Health Organization and Centers for Disease Control and Prevention, as well as all orders and directives regarding business operations issued by Federal, State and local authorities
The company reported that it has ample liquidity and no significant near-term debt maturities, however, in light of the highly uncertain environment, Lear says it believes it is prudent to take a series of preemptive actions to further strengthen its balance sheet and enhance its financial flexibility including:
- Drawing down $1.0 billion from the company’s $1.75 billion revolving credit facility, which matures in August 2024
- Temporarily suspending share repurchases
- Temporarily suspending quarterly dividend
- The $1 billion of funds from the drawdown of the credit facility will supplement the Company’s strong cash position, which, as of Dec. 31, 2019, was approximately $1.5 billion. Following the drawdown, the company will have remaining availability of $750 million on its revolver.
Lear adds that it is taking action to manage operating costs, capital expenditures, and working capital, including eliminating discretionary spending and adjusting production activity in response to rapid declines in industry volumes.
“Lear has a strong balance sheet, which positions us to weather significant industry downturns and uncertain conditions,” says Scott. “During this challenging time, our top priority is the health and safety of our employees, and we have instituted new safety protocols at all our facilities globally.
“We also have dedicated teams working to ensure we will be fully prepared to ramp up our manufacturing operations safely and efficiently when automotive industry production recovers. At the same time, we are proactively managing operating costs and cash flow to minimize the impact of sudden production declines on our profitability and financial position. I am proud of the dedication and resolve our employees have shown during this difficult period and am confident we will emerge from this crisis in a strong financial and competitive position.”
Written by Tim Keenan for dBusiness magazine.