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: 1388261

Reported Deaths: 25531
CountyCasesDeaths
Cook55610710451
DuPage923511316
Will769241031
Lake683331013
Kane59404804
Winnebago34083503
Madison30917526
McHenry29180294
St. Clair28297519
Peoria23442341
Champaign21097154
Sangamon19087239
McLean18547187
Tazewell17224304
Rock Island15242328
Kankakee14543216
Kendall1327899
LaSalle12772249
Macon10995211
DeKalb10109121
Vermilion10014141
Adams8669126
Williamson7581134
Whiteside7197174
Boone683277
Ogle620683
Grundy598778
Clinton578791
Coles5768100
Knox5640153
Jackson510265
Henry507670
Livingston489891
Woodford482982
Stephenson481885
Macoupin478188
Effingham477072
Franklin454878
Marion4512117
Jefferson4419122
Monroe438094
Lee419553
Randolph416487
Fulton405259
Logan396363
Morgan393382
Christian383875
Montgomery379374
Bureau378383
Fayette322655
Perry320160
Iroquois313267
McDonough290551
Jersey271552
Douglas260536
Saline260157
Lawrence241127
Shelby232437
Union227040
Crawford214425
Bond208724
Cass203227
Ford188848
Warren184048
Clark183633
Jo Daviess182724
Pike181853
Wayne180853
Hancock180431
Carroll178037
Richland176940
Edgar176340
White170226
Washington164825
Moultrie163128
De Witt157229
Mason154145
Piatt152414
Clay149643
Mercer149334
Johnson147216
Greene145234
Massac135840
Wabash135612
Cumberland130119
Menard125012
Jasper116118
Marshall108219
Hamilton84215
Schuyler7797
Brown7286
Pulaski7007
Stark64824
Edwards57712
Henderson53014
Calhoun5292
Scott4881
Putnam4863
Alexander47411
Gallatin4684
Hardin39112
Pope3274
Out of IL20
Unassigned02427

Indiana Coronavirus Cases

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

Cases: 750170

Reported Deaths: 13763
CountyCasesDeaths
Marion1031661782
Lake556071007
Allen41654691
St. Joseph36963564
Hamilton36552417
Elkhart29381459
Tippecanoe22879225
Vanderburgh22546400
Porter19347325
Johnson18423388
Hendricks17603317
Clark13202193
Madison13130344
Vigo12609253
LaPorte12408221
Monroe12181175
Delaware10949198
Howard10281225
Kosciusko9619119
Hancock8560145
Bartholomew8163157
Warrick7855156
Floyd7777180
Grant7231179
Wayne7158201
Boone6932103
Morgan6743141
Dubois6212118
Marshall6208116
Cass5999109
Henry5895108
Dearborn589178
Noble580587
Jackson508875
Shelby500896
Lawrence4737122
Gibson444693
Harrison441073
Clinton440655
DeKalb439385
Montgomery435390
Whitley406143
Huntington402281
Steuben399559
Miami393069
Jasper387354
Knox375890
Putnam372160
Wabash360683
Ripley346670
Adams345355
Jefferson335685
White331053
Daviess3032100
Wells295181
Decatur289992
Greene286885
Fayette284864
Posey273835
LaGrange273072
Scott270156
Clay266248
Washington245234
Randolph244683
Jennings235349
Spencer234331
Starke227958
Fountain219648
Sullivan214043
Owen211458
Fulton202142
Jay201032
Carroll193420
Orange188155
Perry187037
Rush175826
Vermillion174644
Franklin170235
Tipton166146
Parke149116
Pike138134
Blackford136132
Pulaski120447
Newton113336
Brown104043
Crawford102316
Benton101314
Martin91615
Warren83615
Switzerland8108
Union72810
Ohio57811
Unassigned0420