Kentucky’s business community has emerged from a never-before-seen coronavirus economic shutdown after implementing a slate of safety measures to replace person-to-person contact with social distancing, separation, masks, gloves and disinfection. By opening up social settings only slowly, the commonwealth so far is keeping its infection rate low enough to shift the economy back into gear.
The Lane Report asked several major employers and members of significant industries—some of which never closed due to their “critical infrastructure” designation—how they have managed their operations during the historic challenges of 2020. Here we share the best practices they told us about.
Ford Motor Co. (Louisville)
Ford suspended production at its North America sites, including Louisville where it has 13,000 employees, after shifts March 19 to thoroughly clean facilities to protect its workforce. North America parts distribution centers resumed full operation May 11 to support dealers in providing service. Ford began a phased resumption of North American production May 18 and will ramp up as its workforce and supply chain are able to support it.
Team members whose jobs could not be done remotely returned May 18. Ford produced personal protective equipment (PPE) and medical equipment during the time vehicle production was paused.
Louisville Assembly Plant returned on a one-shift pattern May 18. LAP, which builds the Ford Escape and the Lincoln Corsair, has 4,100 employees, of which approximately 3,900 are hourly. On June 1, LAP increased production to two shifts.
The Kentucky Truck Plant, which builds the Ford F-250 through F-550 Super Duty trucks, Ford Expedition and Lincoln Navigator, reopened May 18 with a two-shift pattern. KTP has around 8,920 employees, of which 8,620 are hourly.
On the first day back, each Ford employee received a kit with face masks, hand sanitizer, tissues, lip balm and a reusable thermometer. Employees must wear the Ford-provided face mask. Ford installed protective measures in many facilities to protect workers whose jobs must be performed within 6 feet of another person. Safety glasses with side shields or face shields are required in instances where employees’ jobs do not allow for at least 6 feet of separation.
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To create new operations to protect its workforce, Ford’s medical professionals and company leadership worked with experts in infectious disease and epidemiology in consultation with the Centers for Disease Control and Prevention and federal, state and local guidance. The company communicated the practices to employees through its internal website with articles and videos and held on-site discussions.
Ford has developed its own “Return to Work” playbook to ensure workers and suppliers understand Ford’s health and safety practices. The playbooks will change over time as expert recommendations, regulatory guidance and industry practices evolve.
The company implemented robust measures globally to support a safe and healthy environment for its workforce, with health assessment measures, personal protective equipment (PPE), hand sanitation stations through facilities and modifications to increase social distancing. Facilities are thoroughly cleaned with increased frequency now that they have reopened.
Daily online health self-certifications must be completed successfully before work every day. Temperature scans are conducted upon arrival. Everyone entering a Ford facility is required to wear a face mask. The playbook has detailed procedures and protocols for visitors and suppliers.
The company is scheduling more time between shifts to prevent potential interaction between employees and allow for additional cleaning between shifts.
Ford does not know if there will be a lasting impact on employment numbers, but is hiring additional temporary employees to offset an increase in absenteeism due to the pandemic.
While there is speculation some companies will change supply chains as a result of the pandemic and shutdown, Ford reports for now only that its suppliers are put in place several years before it begins to build a vehicle.
As a global company, Ford is evolving health and safety practices as it learns more about the virus and gains experience in its locations around the world. The company said it continues to work with unions, especially the UAW, and experts in infectious diseases and epidemiology, to identify additional methods to keep its workforce safe.
Amazon (Multiple Kentucky sites)
E-commerce giant Amazon has stayed open for business, delivering supplies of every type–some critical–to the doorsteps of homes and businesses. The company is one of Kentucky’s largest employers, with 12,500-plus full-time employees at 14 fulfillment and sortation centers, a customer service center, two Whole Foods Markets and its first Prime Air distribution center, now under construction at the Cincinnati-Northern Kentucky International Airport in Hebron. Getting priority items to doorsteps as communities practice social distancing is essential, according to the company, particularly for the elderly and others with underlying health issues. With the expectation that communities around the world are going to increase social distancing, Amazon believes it has a unique role to play.
Amazon expects to invest approximately $4 billion from April to June on COVID-related initiatives. This includes more than $800 million in the first half of the year on safety measures, including personal protective equipment, enhanced cleaning of facilities, less efficient process paths that better allow for effective social distancing, and developing its own COVID-19 testing capabilities, etc. It doubled janitorial staff and increased cleanings in common areas; scheduled weekly disinfecting foggings; and installed UV lighting sanitation devices in break areas.
Management implemented over 150 process changes. The company has distributed personal protective gear across its entire operations network and plans to continue investing in safety, pay and benefits for its teams who are getting items to communities around the world.
Since the early days of COVID-19’s emergence, Amazon has worked with health authorities to proactively implement measures at facilities to protect employees. It added distance between drivers and customers when making deliveries and every new employee’s orientation includes six hours of safety training.
Amazon leaders meet every day to consider the evolving situation and consult with medical experts to ensure the safety at sites for both employees and customers. Regular, critical updates are being made to logistics, transportation, supply chain, purchasing and other processes.
Among the intense measures to ensure the health and safety of employees is a recently implemented policy that individuals who intentionally violate social distancing guidelines will receive two warnings; a second documented offense can result in termination.
Among the new processes the company has implemented to protect employees are:
• Thermal cameras and thermometers at entries for temp screenings.
• Plexiglas around HR/safety areas to allow effective and safe two- way conversations.
• Glove vending machines.
• Machine learning tools that understand where there may be areas that need added measures of social distancing.
• New software that allows associates to clock in and out from their phone to reduce crowding and congregation.
• Adjusted software on how work is distributed and processed to maintain social distancing.
• Camera-based contact tracing to validate exposure related to any employee who reports a positive case.
• Use of autonomous carts throughout buildings to move inventory, totes and equipment, reducing the number of touches for an item.
As of early June, Amazon had deployed more than 31,000 thermometers and 1,115-plus thermal cameras, provided 100 million masks, added 2,298 handwashing stations, added 5,765 janitorial staffers to teams, deployed an additional 34 million gloves, added 48 million ounces of hand sanitizer, and added 93 million sanitizing sprays and wipes.
The company is working on building scalable testing for the coronavirus. It aggressively and quickly worked to ensure the safety of teams with guidance from the CDC, the World Health Organization and local health authorities. Some of its more than 150 process updates include:
• No stand-up meetings during shifts; essential information is shared on boards near main areas and conversations with managers or human resources team members.
• Staggered shift start times and break times.
• Staggered staffing at work stations.
• Training in small formats and with in-app training tools and other equipment.
• Employees sanitize and clean their work stations and vehicles at the start and end of every shift.
Employment numbers are booming
In March, Amazon announced it would hire 175,000 temporary full- and part-time employees across its North American operations network, including more than 1,700 in Kentucky. It doubled the hourly base pay rate for overtime hours. As the long-term picture became clearer, Amazon said 125,000 of those who joined in a seasonal role will have an opportunity to transition into a permanent, full-time role beginning in June. More than 1,400 of these seasonal-to-permanent, full-time roles will be offered in Kentucky for customer fulfillment and last-mile delivery. They will join 13,000 full-time employees already working in Amazon facilities across the state in 2020.
Permanent jobs at Amazon have a minimum wage of at least $15 an hour plus a comprehensive benefits package with a 401(k) that includes a 50% match. Associates have access to training and continuing education programs like the company’s Career Choice, which creates a springboard into a career at Amazon or other companies. An addition to up to 20 weeks of maternal and parental paid leave, innovative benefits such as Leave Share and Ramp Back give new parents flexibility with their growing families.
Though there have been record U.S. unemployment numbers in the spring, Amazon said its hope is that the option for so many people to stay on long-term at Amazon will help alleviate some of the ongoing burden of unemployment in communities across the U.S.
UPS, one of Kentucky’s largest employers, remained in operation during the entirety of pandemic. As part of the transportation sector, governments around the world deemed UPS operations a critical infrastructure business and company officials coordinate regularly with federal, state and local health officials.
Consumer e-commerce demand for essential and necessary goods surged. In the first quarter of 2020, next-day air shipments increased more than 20% over the same period in 2019. That continued a trend from 2019, when next-day air volume increased 22% for the full year.
Business closures and stay-at-home restrictions disproportionally affected small- and medium-sized businesses (SMB), and UPS reported a dramatic shift in consumer shopping behavior. By late March its normal 50/50 mix of residential and SMB deliveries had shifted to nearly 70% residential deliveries.
For UPS Airlines, the growth has had a huge impact on the Louisville Muhammad Ali International Airport (SDF), home to UPS’s Worldport sorting hub. It is now the fourth-busiest cargo airport in the world, in a 2019 ranking just released by Airports Council International, an industry trade group. It also was the second busiest in North America. SDF jumped three spots, from seventh to fourth, in ACI’s 2019 preliminary world air traffic report.
In 2019, the Louisville airport handled more than 6.15 billion pounds of packages and freight, the vast majority of it UPS volume.
With guidance from the Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO) and local health officials, UPS said its employee protection measures go to great lengths.
When the CDC changed its guidance on face masks, the company purchased and began giving masks to employees and is continuing to procure and distribute masks. All employees have access to masks.
UPS also enhanced cleaning of shuttles, vehicles, facilities and aircraft. Because of the worldwide shortage of cleaning supplies early on, in some cases UPS made its own. As the shortage has eased, it is equipping ramp vehicles with cleaning materials and hand sanitizer. Sanitizer has always been available at entrances, and work processes have been modified to allow for more frequent hand washing.
UPS added 30 school buses to its employee shuttle lineup to allow social distancing when entering and exiting Worldport. New signage and ground markings delineate proper social distancing.
The company continues to educate employees about public health practices—frequent hand washing and social distancing are the most important—and continues to collaborate with health officials to further enhance its coronavirus safety measures.
Beyond its own operations, UPS is participating in a series of relief efforts to combat the coronavirus:
• Multiple UPS Foundation grants (including shipping face shields manufactured at the University of Louisville).
• Donated $100,000 to UofL to fund research for promising COVID treatment.
• Donating N95 facemasks to hospitals in Kentucky.
• Transporting coronavirus tests for the state of Kentucky.
Toyota Motor Manufacturing Kentucky (Georgetown)
Toyota Motor Manufacturing Kentucky and its 8,000 team members resumed operations Monday, May 18, after shutting down Friday, March 20. It took a few days to ramp back up and roll new cars off the production line again, said Susan Elkington, president of TMMK. The plant is working two shifts and expects a full-demand type of operation by the first of August.
Inventories have gone down since TMMK didn’t produce vehicles for nearly two months and dealers kept selling vehicles—though at a much slower pace–by utilizing internet sales and home deliveries.
“During the month of April, year over year sales were down about 55%, which was pretty huge,” Elkington said. “But for May the reduction was more about 15-20% from last year. We are seeing demand continue to increase.
“That first week (of May 18), we ran about 25% and currently we are getting up to about 75% for a full eight-hour shift, so we are making progress,” the TMMK president said in early June. “As a plant we typically run planned overtime to meet production demand the majority of the time. Without planned overtime, the current 75% production level is probably at about 60% compared to what normal would be this time of year.”
The Toyota way of doing business has always focused on kaizen, the Japanese word for continuous improvement.
“We’re used to the changes,” Elkington said. “We’re constantly making changes, so with this change, people could put their head in the sand or they can see it as an opportunity. Our organization has seen it as an opportunity—to make us stronger when we come out of it.”
She recalls the economic crisis in 2008 and 2009, which halted production for a time at the Indiana facility were she then worked, as well as the impact of the 2010 tsunami in Japan. These instilled the idea that no matter the crisis, Toyota will get through it.
The company relies on core principals of respect for its employees first, partnering with its communities, and finding ways to make continuous improvement. The latter involves pulling together to learn from each other and from others, then sharing the findings for improvement.
“Those principles haven’t changed no matter how long I’ve worked for Toyota, and I don’t expect that they will,” Elkington said. “What I’ve learned is that these crises are when you really see who your leaders are and who can really step up and go without a guidebook. We’ve seen that over and over again, the remarkable leadership via the team members, to supervisors, to our executives. It’s amazing how they’ve all pulled together to make it where we can be successful in our relaunch.”
Preparing for the reopening
With operations across North America and globally, Toyota formed a cross-functional team to work on new protocols and created an 82-page playbook. It includes a screening process for entry into the plant: Every person who comes on site must complete a questionnaire and have a temperature scan.
The group developed protocols to modify processes and help prevent the spread of COVID-19 at work, such as keeping team members 6 feet apart. They looked at different types of barriers to create separation and selected a simple, Lexan-type of plastic. Some employees work in face shields to reduce their chances of spreading the virus.
“Everyone here on site wears a face covering all day except for eating and drinking,” Elkington said. “We take very seriously understanding the spread here at work. And our team members have been unbelievable in their response. They want to be back at work producing world-class vehicles for our customers. We’ve had great response.”
The company kept communication lines open during the shutdown.
“During this time we were off we continued to provide pay for our team members. We had some days we asked them to take unpaid or take their vacation time, but for the most part they were paid,” Elkington said. “Toyota did what we call mendomi, which is showing caring concern and treating others like family. Our supervisors would call team members throughout to check in, see how they and their family are doing, tell them about the things happening here at the plant and what to expect when they came back, what we were seeing in our sales.
“We provided videos. We have an app that we use for communications. I would do videos two or three times a week. Initially it was by a selfie stick on my front porch at home, and the last few weeks it was videos here at work, going over how the changes were here.”
Implementing changes at TMMK required significant time on the part of management as well as resources. The plant has 9 million s.f. under roof and every day about 12,000 people come onto the site. Some of the plant’s variable “partner” workforce was furloughed, but management expects all of them back by later this summer.
“I can tell you that before we were shutting down we were talking about how we were going to open back up,” Elkington said. “And that changed. As you’re seeing in the news, every day it seems something different comes out from the CDC, a new recommendation. We are constantly making changes. What we thought we were going to be doing in March is different than we ended up doing.”
However, Toyota did not have to “invent the wheel” in Kentucky for its pandemic response.
“We have plants around the world in regions that were already impacted. We have plants in China, plants in India, plants in Europe, so we were able to learn from them,” Elkington said. “Additionally, the companies here in Kentucky that continued operations have been really great resources. The business community has been very open and sharing with each other about things that we have learned and ways we can keep all of our employees safe. I am on the executive board for the Kentucky Chamber, and Commerce Lexington is a great organization to work with.”
Infection reduction practices staying in place
TMMK did not have to clean 9 million s.f. of workspace since the virus can’t live on its own for two months. The company did disinfect of all common areas, and in many work areas ongoing disinfection and sanitation takes place. Every time team members rotate in their “processes,” they clean any tools or devices they have to handle.
Toyota shifted to fewer team member rotations on its processes. It stops production and allows time for cleaning and sanitizing between rotations.
“Typically we had four team members and every two hours a different team member would rotate through the process, and we didn’t sanitize between,” Elkington said. “We reduced it to two. Our teams have always worn some type of gloves, and we now sanitize in addition to that. I cannot foresee we will be able to reduce these protective measures until there is some type of vaccine or treatment measures that help prevent the spread.”
TMMK will continue to pursue kaizen, Elkington said. The plant makes its own face shields, producing almost half a million as of early June. In addition to being used internally, many are donated. And Toyota continues to improve them as well.
“They are designing one that has the full cover of the face so you don’t have to wear a face covering plus the face shield,” Elkington said. “The engineering staff continues to try to find way to create barriers so it will not be necessary to wear the face covering. Maybe there will be a time we don’t have to wear everything because we have some creative way to have separation or prevention of the spread.”
Building cars remains the same
At TMMK, there are no current expectations of changes in supply chain. The majority of its parts come from North America and some from Japan. And while some manufacturing processes at TMMK were adjusted, it wasn’t many. Most adjustments were ways to physically separate processes to create social distancing.
“Maybe the team member now has a barrier between them and that person beside them,” Elkington said. “But the way we build cars is the way we’ve always built cars. We’re just trying to find ways to separate them a little bit farther.”
Nearly 70% of processes and operations at TMMK already allowed for more than 6 feet of separation, she said, so the focus is on the 30% as well as the supervisors and team leaders because they have the personal interaction with team members.
“For the line operators, maybe it has not changed that much,” Elkington said. “But amongst our engineering staff and our production control staff, we are doing things a lot more remotely. We have become experts. It’s surprising how much paper we used to use and how we’ve shifted to digital means of doing work remotely to prevent having to print out paper and prevent having to hand off paper and pens from one person to another.”
Many plant management functions such as collecting and trending data now take place digitally by smartphone.
A significant impact on costs
Toyota does not know what its total cost for responding to the pandemic will be, but knows it will be a lot.
There are one-time costs to cover shutting down operations for two months and continuing to pay employee wages and utilities for a 9 million-s.f. facility not in operation. Among ongoing costs, there is additional labor for spending time to sanitize as well as to make certain all those things are, indeed, performed. There are additional costs for the materials to sanitize and implement temperature scanning.
“We are still very early in our return (to work) and finding ways to reduce that cost every day,” Elkington said. “Just think about face shields. If you try to buy them it would cost a dollar apiece, and you’ve got 8,000 Toyota employees who need one every single day. And we have many vendors who come on site. It adds up.”
At TMMK, there are no current expectations of changes in supply chain. The majority of its parts come from North America and some from Japan.
Logan Aluminum Inc. (Russellville)
Logan Aluminum continued to operate at full capacity throughout the pandemic. Its primary product is rolled aluminum sheet for the can-stock market, which has remained strong, President Mike Buckentin said.
A significant amount of time on the part of the crisis management team was required to come up with new operations, particularly in the areas of environmental/health/safety and human resources. Workplace training and communication were conducted multiple times per week to ensure understanding and adherence to the new policies and practices.
As part of Logan’s crisis management training, the plant conducted a table-top exercise several years ago for a pandemic-type event, Buckentin said, adding that the current COVID-19 event has been far more extreme than anything they could have imagined, but the company had made some preparation for supplies (masks, gloves, etc.)
Logan purchased fogging machines in order to frequently clean high-traffic areas and portable spraying machines for cleaning vehicles and other mobile equipment. Contracts with a professional cleaning company were implemented to clean areas that were identified as high risk.
Social distancing of 6 feet is required wherever possible. When not possible, a mask is required. Temperature screening equipment has been installed at all entry gates, and all employees answer health questionnaires prior to entering the workplace.
As of early June, a large percentage—approximately 70%—of Logan employees were working remotely. The company’s operations tend to lend themselves to allowing people to be able to social distance while performing most tasks. Logan plans to return all staff to the site when it is safe to do so and doesn’t foresee any long-term impact on employee numbers.
There has been some impact in terms of cost, but controlling those costs has been a high priority for the company, Buckentin said. Additional costs incurred for COVID-related personal protective equipment and supplies, additional / enhanced cleanings, etc., have been somewhat offset by reduced expenses in other areas such as business travel. Buckentin said the company does not foresee any supply-chain changes as a result of the pandemic/shutdown.
Kentucky Power (Ashland)
As a critical infrastructure company, Kentucky Power has continued to provide energy to customers throughout the pandemic.
While many AEP employees can work from home and are doing so, line workers, power plant employees and other critical functions need to report to work locations to keep the lights on for customers. Kentucky Power split up distribution dispatch centers into multiple locations to increase physical distancing for the critical employees who manage and dispatch all outage and hazard orders for customers. It also transitioned more than 82% of call center employees to work from home to increase physical distancing for those still working in the centers.
In its work spaces, Kentucky Power established more frequent cleaning and disinfecting protocols, focusing on high-traffic areas and surfaces touched frequently by multiple people, and put additional cleaning measures in place for fleet vehicles. Deep cleaning and disinfecting is performed when an employee or contractor has been exposed to or diagnosed with COVID-19.
The company has taken significant steps to keep employees safe and healthy. Line workers and other critical employees who have continued reporting to work sites are working in smaller teams, practicing physical distancing, wearing facial coverings when physical distancing is not possible, monitoring themselves for symptoms and taking other preventive measures recommended by the CDC. Kentucky Power has been educating customers to maintain at least 6 feet of physical distance from workers.
AEP employees who can work from home continue to do so to help minimize contact for all employees. Approximately 12,000—or 70% — of AEP’s employees have been working successfully from home since mid-March. There is no expectation of any impact on employee numbers.
The company put in place illness-prevention etiquette guidelines directing employees and contractors to clean their workspaces daily; stay home if they are sick; and wash hands or use hand sanitizer regularly and especially after using frequently touched surfaces. These measures will continue during annual cold and flu seasons.
Working effectively through the pandemic has required flexibility, ingenuity and resilience. AEP is studying the innovative ways its teams have transformed their work during this time in order to build upon them for the future.
Overall AEP expects residential sales to increase 3% over 2019 levels, largely driven by the activity taking place in homes rather than workplaces or classrooms.
Conversely, commercial sales are expected to decrease 5.6% and industrial sales to decline 8% over 2019 levels. Many businesses have shifted operations to a mostly online platform, while other employers have had to make the difficult decision to furlough or reduce employee head count until market demand is restored. These forecasts lead AEP to expect an overall decline in sales of 3.4%.
AEP has a team of experts dedicated to helping small business customers apply for federal relief programs and make payment arrangements. The Business Solutions Center team has assisted nearly 1,000 business customers with their needs related to the pandemic.
Regarding supply chains, like many companies, lead time for some of equipment has been extended during the pandemic, but AEP typically has more than one supplier for critical equipment and was able to plan ahead and manage through any delays.
The company understands the critical nature of the power services it provides and plans for all types of emergencies, including storms and other widespread events that could disrupt power for customers. Emergency management plans outline how to keep employees safe and healthy while maintaining service to customers. Although this was a different kind of storm, response plans and efforts to train and exercise for all types of events prepared AEP to navigate these challenges in a coordinated way. ■