A tough decision during a tough time.

Ferrari will halt production at its Maranello and Modena production facilities until March 27th due to the growing impact of the Coronavirus. This decision follows Lamborghini who plans to shut down until March 25th. Ferrari plans to resume production in two weeks but will things be back to normal?

Ferrari explained to Bloomberg that it was starting to experience the Coronavirus’ impact on its supply chains as goods from across the globe became harder to acquire. This pause in production will allow suppliers to catch up with Ferrari's needs while also keeping employees safe from their infection. 

A decision to halt production at the Ferrari plant was certainly not an easy one. In a low volume production environment for highly engineered goods, every second counts, and a loss of two weeks will be hard to recover from. With Ferrari’s aggressive research and development aspirations coupled with a waiting list of customers around the globe, only a very serious situation could cause the company to shut down for an extended period. 

Ferrari is also in the midst of the 2020 F1 season delay with the last-minute cancelation of the Australian Grand Prix which was scheduled for this weekend. The F1 season is now set to start later this year when the Coronavirus will hopefully be contained, but as of right now there is no clear start date. During the delay, all teams will continue to develop their cars, which means Ferrari cannot afford to slow down development to stay competitive. 

During the shutdown, Ferrari will continue to pay all of its workers and plans for a strong restart later this month. Only time will tell if the climate is ready for work to resume in two weeks or if the delay will be extended.

Source: Bloomberg