The global pandemic has shaken assumptions and forced us to adapt. But it’s also opened up new opportunities, insights and connections.
The Space Between is the title of a Dave Matthews Band song that I really enjoy.
The space between has also oftentimes been referred to as the little dash on a person’s tombstone that separates their birthdate and the day that they died. That little dash is representative of where life happens… between the birthdate and the day we pass over to the other side.
You might ask why am I waxing philosophically in a column about the automotive industry. The answer lies in the fact that we currently are in the space between in the automotive industry… and in the global economy generally
COVID-19 has changed the world, arguably forever in many ways, and in ways that we will only fully realize when we come out the other side of this pandemic.
In the space between pre-pandemic and post-pandemic, we find ourselves in a world that relies much less on the products the automotive industry produces as people self-isolate from their homes to assist in preventing the spread of the coronavirus known as COVID-19.
People have largely adapted to self-isolation and it is not unreasonable to think that both employers and employees may come to better appreciate the opportunity that working from home presents for both parties.
What happens when workers get sick or can only work on the basis of social distancing?
This “opportunity” could potentially have a fairly significant impact on the automotive industry if employers and employees start to realize that people can be just as productive — if not more so — working from home. The implications may well be that perhaps many families come to the realization that they do not need that second or third car.
Now, COVID may not feel like an “opportunity” to the young couple both social isolating and working from home while trying to entertain/educate three kids under 7, but I would argue that even that is part of the space between. To go off on a bit of tangent here, just think about that scenario.
When, in perhaps the last century if not longer, was there ever the situation where kids had both of their parents home for an extended period of time, that didn’t involve at least one of them going off “to work.” What an opportunity. What a gift for family members to get to really know one another for better or worse. I am sure, when COVID passes that this time will be indelibly etched in the minds of family members as a collective memory that they will look back fondly on and say, “Remember COVID-19 in 2020 … that was great, we learned so much about each other.”
In COVID-19, in the space between, the automotive industry is learning about itself too. Things it perhaps took for granted in the past have been brought to the fore. We gained, and are gaining a new appreciation about how extensive the global supply chains really are to make the vehicles we drive.
While of course we understand how extensive the global supply chains are, we perhaps have never stopped to consider exactly how much that global supply chain is predicated on open borders and the free movement of goods, components and supplies. What has come into focus is just how fragile that whole system is.
What happens when workers get sick or can only work on the basis of social distancing? Many plants and plant operations were not set up for mass sick leave, nor every operation of the plant oriented around at least two meters of space between one person and the next.
What happens when governments initiate emergency measures to mitigate the spread of diseases and viruses and that impacts not only your ability to operate but perhaps your ability to get your supplies, parts, components, vehicles to market because borders are closed?
What happens when parts, components and supplies arrive in plants from other jurisdictions? Are new protocols going to have to be considered to somehow “certify” that a shipment is COVID- free before it can come into a densely populated manufacturing environment?
What happens at the dealership when consumers come in to touch, feel and drive the vehicle that they have spent so much time looking at and researching online?
If you think about the pre-COVID world, the dealership experience of looking at and ultimately purchasing a new vehicle is both a very tactile experience and a very social experience with the consumer interacting, sometimes in close quarters (think test-drives), with a number of different dealership personnel from the sales person, to the business manager, to the service manager etc.
One thing would seem to be clear is that the post-COVID world will likely be more expensive.
Things may go partially back to this type of experience after this space between called COVID, but I would argue that the whole dealership experience will change permanently as a result of the virus as well. These are all things that we never really had to think about before but which are now part of the risk analysis for our industry.
One thing would seem to be clear is that the post-COVID world will likely be more expensive whether that be for a new car or a roll of toilet paper, because companies are realizing their vulnerabilities and having to implement new protocols to address them. New protocols generally cost money and the cost of those new protocols — all throughout the supply chain — ends up adding potentially a lot of cost to a product.
When the cost of all products goes up, consumers are challenged to be able to continue to make ends meet. This burden is felt even more acutely by those that have lost their jobs during this COVID space between — at least some of which may never return.
Higher consumer costs, job uncertainty and higher unemployment are not positive factors to facilitate the second largest purchase a consumer will ever make, and, in many cases a purchase that is somewhat discretionary and deferrable.
In the space between, assembly factories are shut as are parts suppliers — aside from those creative, innovative and inspiring companies that have quickly re-tooled to make both ventilators and PPE for the front line workers in the war that is COVID-19. Kudos to these companies and again, what an opportunity to see first-hand how innovative and creative our Canadian automotive industry really is. It has been a real inspiration to many.
Closer to the consumer, retail dealership operations are largely closed and certainly the sales departments. However, for many dealers the parts and service operations that have been allowed to stay open under the various emergency measures introduced federally and by provinces across Canada, have been doing very good business in many cases.
The space between implies — obviously — a beginning and an end for there to be a space between. There will be an end. There may not be an end to COVID but there will be an end to this unprecedented lockdown personally and economically that we are all currently experiencing.
I do not have a crystal ball but what seems clear is that the world cannot afford, economically, to stay locked down for an indefinite period of time without risking complete economic collapse. So we will have to emerge from the space between with the virus that put us into the space to begin with.
Now is the time to get ready and prepare to kickstart the economy and the automotive industry — moving forward safely and cautiously with COVID — and end this unique space between.
