AutoNation’s Mike Jackson told CNBC on Monday that U.S. auto plants should be reopened to support increasing demand for vehicles as the U.S. economy tries to restart from its coronavirus-driven halt.
“It’s entirely appropriate that the factories reopen. I fully support it. We need the vehicles,” Jackson said “Squawk Box.” “As a matter of fact … I would go so far as to say, I support Elon Musk. Tesla should open.”
AutoNation, the country’s largest auto dealership chain, sells used Tesla vehicles.
Jackson, executive chairman of AutoNation’s board and interim CEO, has been a frequent critic of Musk, the CEO of Tesla who is pushing back against health officials in Alameda County, California, over his desire to restart production at the company’s main U.S. car plant in Fremont, which is located in the county.
Dr. Erica Pan, the county’s interim public health officer, has said health orders to contain a Covid-19 outbreak in the region remain in effect. She said that the electric vehicle maker does not have a “green light” to resume operations.
Tesla on Saturday filed suit against Alameda County, arguing its rules contradict the state of California’s policy on business closures. The company has released a list of safety protocols it would implement while working during the pandemic.
Treasury Secretary Steven Mnuchin also told CNBC on Monday that he agrees with Musk’s wish to restart operations. “He’s one of the biggest employers and manufacturers in California, and California should prioritize doing whatever they need to do to solve those health issues so that he can open quickly and safely,” Mnuchin said on “Squawk on the Street.”
Ford, General Motors and Fiat Chrysler have plans to restart production at manufacturing facilities on May 18. On Saturday, Scott Haggerty, supervisor for the Fremont district of Alameda County, told The New York Times that the county and Tesla executives were in talks on a plan to restart the plant on May 18, as well.
Jackson, who is back in the CEO job for Cheryl Miller as she takes a leave of absence for health reasons, said there is growing demand for vehicles in the U.S., following a significant downturn driven by pandemic lockdown orders.
Sales at AutoNation had been down around 50%, Jackson said, but in the last 10 days of April, they were down just 25%.
“Now, I never thought I’d be celebrating only being down 25% down but it could have gone the other way. I’m comfortable sitting here today and declaring the automotive recovery is underway,” he said.
Jackson said he believes there are a few factors behind the uptick: pent-up demand, favorable financing and the “need for personal space” in response to concerns about the virus.
Jackson added that he believes the U.S. should continue to take steps to ease up on coronavirus-related business restrictions, saying that the restrictions largely succeeded in keeping the country’s health-care system “from being overwhelmed.”
“That goal has by and large been achieved. It wasn’t to shelter in place until there’s not one more case of corona,” Jackson contended. “Don’t let the health-care system be overwhelmed, so now that it has not, and we paid a big price for that ask of America, it’s time to gradually, safely, reopen and rebuild America.”
— CNBC’s Lora Kolodny and Jessica Bursztynsky contributed to this report.