Business Fallout: Companies hoard cash, Walmart hiring 150K

Less than three months ago came the first reports of cases of pneumonia related to a virus first detected in Wuhan, China. The outbreak of the virus that causes COVID-19 has caused unprecedented disruptions that have brought an unparalleled shock to the global economy.

Posted: Mar 20, 2020 12:50 PM

Less than three months ago came the first reports of cases of pneumonia related to a virus first detected in Wuhan, China. The outbreak of the virus that causes COVID-19 has caused unprecedented disruptions that have brought an unparalleled shock to the global economy.

Following are developments Friday related to the outbreak, efforts by governments to stabilize their economies, companies that must navigate through an altered landscape, and the millions of people affected.

GROUNDED: The lowest number of passengers ever recorded at U.S. airports is being reported by the Transportation Security Administration. Nearly 624,000 people passed through its outbound checkpoints on Thursday, the TSA said. That compares with 2.4 million on the same day a year earlier. It’s the lowest number of outbound passengers ever recorded by an agency created in November 2001 in the wake of the Sept. 11 terrorist attacks.

The CEO and labor leaders at American Airlines wrote to Treasury Secretary Steve Mnuchin and congressional leaders Friday imploring them to quickly approve aid for airlines or else workers will lose their jobs. The company says it will accept “appropriate conditions” on government aid.

Frankfurt airport operator Fraport AG has put 18,000 of its 22,000 employees on shortened schedules, saying that “traffic has come almost to a halt.” Wages will be partly covered by the German government’s short-work policy. The company said it would add payments to ensure at least 75% of pay. Fraport also took its northwest landing runway out of service. It will instead be used to park unused airplanes.

CLOSE TO HOME: The chairman and CEO of Marlboro-maker Altria Group has contracted COVID-19. The company said in a regulatory filing that Howard Willard is on medical leave. Chief Financial Officer William Gifford, Jr. will lead the company in Willard’s absence. The company is also suspending operations at its plant in Richmond, Virginia, for two weeks after two employees contracted the COVID-19 virus. Some domestic operations at its John Middleton Co. subsidiary will also be suspended due to supply chain issues. The tobacco giant said employees will continue to receive regular pay during the two-week shutdown.

NBC News reported Friday that an employee who worked at the company’s 30 Rockefeller Plaza headquarters in New York has died from COVID-19. According to his wife, Larry Edgeworth had other health issues before contracting the coronavirus. Edgeworth died Thursday.

FIREWALL: Companies across almost every sector are raising cash to ride out the outbreak.

Kohl’s has fully drawn its $1 billion unsecured credit facility. The department store chain, based in Menomonee Falls, Wisconsin, is slashing inventory and expenses. Kohl’s Corp. has closed its 1,100 stores for at least the rest of the month. It and many other major chains are temporarily closing stores to curb the spread of the coronavirus.

AT&T cancelled a $4 billion accelerated stock buyback program scheduled for the second quarter. The company said in a regulatory filing that it’s also canceling any other stock repurchases so it can have financial flexibility and continue to invest in its business. AT&T said it’s currently unable to estimate the impact the virus will have on its financial and operational results.

FUTURE UNKNOWN: Coca-Cola Co. no longer expects to reach previously set financial goals for the year. Coke said in a regulatory filing that restaurant closures, suspended NHL, NBA and MLB seasons, reduced travel, social distancing, and more people working from home is straining operations. The Atlanta company said that it cannot reasonably estimate the negative impact the virus will have.

Kohl’s withdrew its full-year and first-quarter forecasts. Several other chains like Nordstrom and Abercrombie & Fitch have also withdrawn their guidance given so much uncertainty.

FACTORIES GO DARK: Thousands of businesses have ordered employees to work remotely. It’s obviously not an option for a number of sectors and the impact on heavy industry has been immense. All major U.S. automakers, including Tesla, have shut down their factories.

Mercedes-Benz is one of the latest automakers to announce that it’s pausing production. The company says Friday its auto plant in Tuscaloosa, Alabama, and a van factory in Charleston, South Carolina, will start to wind down production Monday, for at least two weeks. The company says it’s following recommendations of authorities and that it will monitor the situation and “take further measures as required” to help contain the spread of the virus.

Jaguar Land Rover is suspending production at its U.K. plants. The company said in a statement that production will be temporarily halted over the course of next week, with the intention of resuming on April 20, subject to a review of the “rapidly-changing circumstances.”

Though it is shuttering its plants in the U.K., its manufacturing plants in Brazil and India continue operating. The company’s joint venture plant in China reopened around a month ago. Des Quinn, an official from the Unite union, said as a result of previous agreements with the company workers will continue to be fully paid.

Other firms including BMW, Honda and Toyota have already halted production in the U.K.

Volvo Cars said Friday that its Swedish and U.S. plants will close on Thursday and will remain closed until mid-April. Office employees are being ordered to work remotely with reduced hours. The company said it reopened four manufacturing plants in China earlier this month after an extended closure.

STREAMING LOGJAM: YouTube is reducing its streaming quality in Europe as more users self-isolate at home.

The company, owned by Google, said Friday it would “temporarily default all traffic in the U.K. and the EU to Standard Definition,” instead of high definition. The measure will be in place for 30 days and users will still be able to manually adjust their video quality.

YouTube follows Netflix, which said Thursday that it expects the video bit rate reduction to cut its European traffic by a quarter.

The companies are responding to a call by the European Union’s internal market commission, which urged streaming services and network operators to help prevent network congestion as more people use their home internet connection to work or learn remotely or for entertainment.

iHOARDING: Apple is allowing people to buy only two iPhones online. It may be attempting to prevent the large purchase and resale of its technology at higher prices. Apple is facing a potential demand decline and supply chain issues due to the virus pandemic spreading across the globe. It closed all retail stores outside of China to help fight the spread. Apple did not return a request for comment Friday. Apple announced a new iPad Pro and MacBook Air on Wednesday. It made no mention of new iPhones during the announcement.

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Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Cases: 1194629

Reported Deaths: 22947
CountyCasesDeaths
Cook4773819428
DuPage775061205
Will65561906
Lake59972931
Kane51118723
Winnebago28430444
Madison28186461
St. Clair25649469
McHenry24580266
Champaign18241127
Peoria16983266
Sangamon16243222
McLean14707160
Tazewell13627240
Rock Island13140287
Kankakee12576189
Kendall1116987
LaSalle10884222
Macon9508186
Vermilion8618118
DeKalb8354115
Adams8035114
Williamson6858121
Whiteside5947149
Boone593671
Clinton558289
Coles523992
Grundy518563
Ogle505475
Knox5022133
Jackson461560
Effingham450169
Macoupin437280
Henry434658
Marion4272112
Livingston425277
Franklin416566
Stephenson411176
Monroe408486
Jefferson3994116
Randolph398079
Woodford369860
Morgan361277
Montgomery353670
Lee337243
Christian332668
Bureau332476
Logan331353
Fayette307052
Perry306857
Fulton288145
Iroquois278862
Jersey249947
Douglas246933
McDonough233740
Saline232848
Lawrence231924
Union220638
Shelby215234
Crawford201324
Bond191624
Cass189522
Pike170250
Clark168831
Wayne168849
Hancock168229
Warren166544
Richland163638
Jo Daviess161422
White161425
Ford159845
Washington158724
Carroll158035
Edgar155338
Moultrie150224
Clay143542
Greene138332
Johnson135312
Piatt133914
Wabash130512
Mercer128733
Mason128641
De Witt128322
Massac128134
Cumberland120118
Jasper111217
Menard10428
Marshall84515
Hamilton79115
Schuyler6825
Pulaski6716
Brown6656
Stark54422
Edwards52810
Henderson50414
Calhoun4822
Alexander4539
Scott4491
Gallatin4384
Putnam4213
Hardin34612
Pope2843
Out of IL50
Unassigned02246

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Cases: 665285

Reported Deaths: 12697
CountyCasesDeaths
Marion910581653
Lake48637887
Allen36050641
Hamilton32231398
St. Joseph30243514
Elkhart25484420
Vanderburgh21315382
Tippecanoe20185205
Johnson16425361
Porter16053276
Hendricks15899301
Clark12032182
Madison11779321
Vigo11672231
Monroe10394164
Delaware9879179
LaPorte9821198
Howard9095199
Kosciusko8588111
Bartholomew7504147
Warrick7445153
Hancock7439134
Floyd7255172
Wayne6654192
Grant6453157
Boone611991
Morgan6118126
Dubois5933112
Dearborn550669
Cass5477100
Marshall5446105
Henry542695
Noble510978
Jackson465567
Shelby462591
Lawrence4193113
Gibson404985
Harrison402764
Clinton397053
Montgomery390584
DeKalb387178
Knox357885
Miami357863
Whitley350638
Huntington348377
Steuben339855
Wabash333076
Putnam331960
Ripley327862
Adams325149
Jasper318443
White298052
Jefferson295974
Daviess285696
Fayette272656
Decatur271388
Greene262280
Posey261432
Wells258975
Scott251450
LaGrange242170
Clay241444
Randolph225877
Spencer219330
Jennings216344
Washington213027
Sullivan203639
Fountain202542
Starke189251
Owen183453
Fulton179637
Jay178528
Carroll176919
Perry173836
Orange171351
Rush165422
Vermillion161542
Franklin159735
Tipton149241
Parke140116
Pike128433
Blackford120627
Pulaski107544
Newton96732
Brown95240
Benton92413
Crawford92113
Martin80314
Warren75914
Switzerland7558
Union67510
Ohio54111
Unassigned0434