The rapid spread of the coronavirus since it was first reported in China has dealt an unprecedented shock to the…
The rapid spread of the coronavirus since it was first reported in China has dealt an unprecedented shock to the global economy.
Following are business developments Monday related to the outbreak as governments attempt to stabilize their economies, companies struggle to cope and millions of people face job losses and disruptions in supplies of goods and in services.
AIRLINES: Airlines can’t seem to cut capacity as fast as air travel is fading as businesses and vacationers pull back on plans. Industry analysts are slashing their expectations even faster, with cuts of 40% or more the norm.
Air Canada is laying off more than 5,000 flight attendants as the country’s largest airline cuts routes amid plunging demand. The layoffs will take effect by April and affect roughly 60% of flight attendants. Air Canada says it will suspend most of its international and U.S. flights by March 31.
GE aviation will cut about 10% of its U.S. workforce. David Joyce, vice chairman of GE and CEO of GE Aviation, will give up half of his salary starting April 1. The aviation arm of General Electric had already announced a hiring freeze, the cancellation of a salaried merit increase, a dramatic reduction of all non-essential spending, and a significant decrease in its contingent workforce.
Canadian airline and travel company Transat AT Inc. has temporarily laid off about 70% of its workforce in Canada, or about 3,600 people.
The United Arab Emirates is suspending passenger transits through Dubai, the world’s busiest international airport, for two weeks to help stop the spread of the coronavirus. Suspending transit through Dubai, which connects Europe with Asia and Australia, will affect travelers around the world.
Low-cost airline Eastar Jet has become the first South Korean carrier to shut down all flights as demand plunges. The company says it will temporarily suspend its domestic flights from Tuesday to April 25.
REPURPOSED: General Motors is exploring the production of ventilators at a facility in Kokomo, Indiana. The automaker said Monday that it’s working around the clock with Ventec Life Systems of Washington State to build more of the critical medical devices. GM spokesman Dan Flores said he can’t comment on how many more ventilators Ventec will make or how soon they will come. The GM statement also didn’t say when the Kokomo facility might be in operation. Supply chain experts say it will be difficult to repurpose an auto plant to build a smaller, unrelated product such as ventilators. They say such a change could take months, but GM may be doing it faster. In an email to GM senior management late Sunday, Shilpan Amin, the company’s vice president of purchasing, wrote that GM has commitments from Ventec’s parts companies to supply 93% of the ventilator’s parts to GM. The company is developing plans for the remaining 28 parts, he said in the email.
Yves Saint Laurent and Balenciaga are the latest luxury fashion labels ramping up the manufacturing of surgical masks to help the fight against COVID-19. The Kering Group, which owns the labels, says French workshops that usually make clothes for Yves Saint Laurent and Balenciaga will switch over to manufacturing masks. Kering said it will also buy and import 3 million surgical masks from China for donation to the French health service. The world’s largest luxury group — Paris-based LVMH —has also said it has reached a deal with a Chinese industrial supplier to deliver 10 million masks to the French population.
CORPORATE FIREWALLS: Airbus is canceling a planned dividend payment and lining up 15 billion euros ($16 billion) in new credit to give the European aircraft giant more cash to weather the crisis. The plane maker had shut several plants last week to adapt them to safer health conditions.
Apparel company VF Corp. says it will draw down $1 billion from its revolving credit facility.
Royal Dutch Shell will reduce its operating costs by between $3 billion to $4 billion for the next 12 months to adapt to the virus outbreak crisis and plunging oil prices. The company is also reducing capital expenditure to a maximum of $20 billion, down from its previous expectation of $25 billion.
HEAVY INDUSTRY: Millions of people are working at home. However, heavy industrial sectors have come to a standstill because the risk of infection, if operations continue, would be unavoidable.
A big auto industry trade group is telling Congress that 95% of U.S. auto assembly plants have been forced to close due to the coronavirus outbreak.
The Alliance for Automotive Innovation says in a letter obtained by The Associated Press that 42 of 44 U.S. auto assembly plants were closed as of Friday. The letter says 87% of the assembly plants in North America have been closed, including all seven in Canada and 60 of 69 in Mexico. It…
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