sunny.png
Saturday March 28th, 2020 7:47PM

Monday: Big layoffs, bigger hirings, massive markets swings

By The Associated Press
Related Articles
  Contact Editor

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 says analysts expect March sales to fall by up to 40% from 2019 figures. The association is asking Congress for loans and loan guarantees for affected companies. It also is asking that businesses with more than 500 workers that provide paid leave for employees get a tax deduction or credit. Most U.S. auto assembly workers are being paid through the closure, which in most cases is scheduled to last into late March and early April. The industry also wants Congress to delay 2020 quarterly federal tax payments, start a temporary payroll tax holiday, extend expensing for machinery, and delay the June 1 effective date of the USMCA trade pact, which replaces the North American Free Trade Agreement.

Forecasting as much as a 60% decline in reservations for April due to coronavirus travel restrictions, rental car giant Avis is cutting staff, reducing its fleet and pausing capital spending, among other actions. The company says it will also evaluate compensation expenses for senior employees, including executive leadership, as it looks to save $400 million on an annualized basis. The Parsippany, N.J.-based Avis Budget Group said it has accessed $1.1 billion in cash from equity in its vehicle fleet and has an estimated $750 million in revolving credit, giving it the liquidity to operate “through the end of 2020 and beyond.”

Winnebago Industries halted production to protect workers from coronavirus exposure and to adjust production as demand for the company's products is rapidly changing. Winnebago, which employees about 5,000 people, makes motor homes, travel trailers and boats under the Winnebago, Grand Design, Newmar and Chris-Craft brands. The Forest City, Iowa-based company has production facilities in Iowa, Indiana, Oregon, Minnesota and Florida. The company said Monday that production will cease until at least April 12. Benefits and base pay will continue for the first two weeks.

Ford Motor Co. has suspended vehicle and engine production at its International Markets Group manufacturing sites located in India, Vietnam, South Africa and Thailand. The suspensions started Saturday and will continue for several weeks.

REAL ESTATE: To conserve capital, Zillow Group postponed home buying in the 24 markets where it participates in such activity. Zillow stopped open houses for homes in all markets last week.

U.S. home sales jumped 6.5% in February, their highest level in 13 years. But that was for contracts that were signed in December and January, with closings in February. The first report of a coronavirus infection in the U.S. occurred on Jan. 21 and economist are expecting a vast slowdown in the next report with sellers closing their homes to potential buyers.

The commercial real estate market is at risk of collapse, cautions the founder of Colony Capital, as mortgage loans experience growing pressure. Thomas Barrack said in a blog post that liquidity has dried up as businesses get hit with a temporary cash flow deficit and a rapid decline in revenue. "The market for commercial real estate mortgage loans in the United States stands on the brink of collapse," Barrack wrote.

RENTERS: The federal regulator of giant mortgage buyers Fannie Mae and Freddie Mac is aiming to provide relief from eviction for renters in multifamily buildings who are affected by the viral crisis. The Federal Housing Finance Agency says Fannie and Freddie will offer owners of multifamily properties forbearance relief on their mortgages, on condition they suspend all evictions of renters who are unable to pay due to the impact of the virus. The two companies together guarantee about half of the U.S. home-loan market. Last week they temporarily suspended foreclosures and evictions of borrowers in single-family homes whose mortgages they guarantee.

SUPERMARKETS: B.J.'s Wholesale Club is the latest to offer a bump in hourly wages to workers restocking shelves while others stay home. Increased hourly pay would extend at least through April 12. Managers and key personnel will get a one-time bonus, ranging from $500 to $1,000. Walmart, Target and Amazon are among the other company's giving pay hikes. Walmart is also giving one-time bonuses to its hourly part-time and full-time workers.

HIRING: The spread of the virus has created a massive disruption in the work place, with may companies sending workers home. However, other companies, largely those considered essential during the outbreak, have gone on a hiring binge.

Dollar General will hire up to 50,000 workers by the end of April as people ordered to stay home clear the bargain chain's shelves and stock up pantries. Dollar General said Monday that most of the jobs will be temporary, but that some may be long term.

Papa John’s is hiring up to 20,000 people with demand for pizza elevated. The need for new workers is so great, the company said Monday that interviews can turn into punching the clock on the same day. Domino's already announced additional hiring.

CVS Health also announced Monday that it is looking to fill 50,000 full-time, part-time and temporary roles across the country. Positions include store associates, prescription delivery drivers, distribution center employees and member/customer service professionals. The company is also giving employee bonuses ranging from $150 to $500 to workers required to be at its facilities.

Instacart is looking to add 300,000 gig workers to its platform over the next three months, more than doubling the number of people it has picking and delivering groceries for customers. Online retailers have seen demand for orders surge as more people are stuck at home and shopping online. Instacart said it will focus on bringing on more personal shoppers in 10 states where demand is the highest: California, Florida, Georgia, Illinois, New Jersey, New York, Ohio, Pennsylvania, Texas and Virginia.

THE STORES: H&M warned Monday that it may need to permanently lay off workers as it wrestles with the financial implications of the virus. The Swedish fast fashion company said that 3,441 out of its 5,062 stores globally are temporarily closed. The closures, aimed to stop the spread of the virus, has had "'significant negative impact on sales so far in March," the company said.

THE WAITING: Amazon is telling shoppers some items could take up to a month to deliver as it deals with a rush of online orders. The company said it is focusing on getting medical supplies, hand sanitizers, baby formula and other essential items to customers first. Some best-selling books, for example, said they would be delivered at the end of April, much longer that two-day or less deliver times Amazon typically promises. The online retailer recently said it plans to hire 100,000 people in the U.S. to keep with an increase in orders as more people stay home and shop online.

ENERGY: The energy sector has lost almost half of its overall value in the month of March. Economic forecasts indicate a vast reduction in the amount of energy that will be needed as national economies are broadsided.

Total announced Monday that it is planning more than $3 billion in organic capital expenditure cuts and suspending its $2 billion buyback program. The company is also now planning $800 million in savings this year, up from its previously announced $300 million in savings.

When the company had announced its buyback program, oil was around $60 per barrel. Since the coronavirus outbreak and oil dispute between Saudi Arabia and Russia, oil has fallen as low as $24 a barrel.

GIG ECONOMY DISRUPTED: Uber CEO Dara Khosrowshahi is calling on the federal government to help independent workers such as the drivers and delivery workers on its platform, not just full-fledged employees. Khosrowshahi sent a letter to President Donald Trump Monday. Uber has 1.3 million people working on its platform in the United States. Khosrowshahi says they are delivering food to people staying home and providing essential transportation services. The company has offered up to 14 days of financial assistance to drivers and delivery workers who were diagnosed with Covid-19 or placed in quarantine.

  • Associated Categories: Associated Press (AP), AP National News, AP Online National News, Top General short headlines, AP Online Headlines - Washington, AP Online Congress News, AP World News, AP Business, AP Business - Corporate News, AP Online - Georgia News, AP World News - International incidents, AP Business - Economy, AP Business - Industries, AP Business - Utilities, AP Business - Personal Finance, AP Business - Real Estate
© Copyright 2020 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
War-torn Syria braces for lockdown after first virus case
Syrians are rushing to stock up on food and fuel amid fears that authorities will resort to even stricter measures after reporting the first coronavirus infection in the country
10:17AM ( 16 minutes ago )
Over 1.5 billion globally asked to stay home to escape virus
More than 1.5 billion people, a fifth of the world's population, are being asked or ordered to stay home as new virus infections soar
10:11AM ( 23 minutes ago )
India halts its crucial train network to try to stop virus
India has expanded its virus-containment measures and halted its train network, the country's lifeblood
10:05AM ( 29 minutes ago )
Associated Press (AP)
Stocks open lower on Wall Street as relief bill stalls
Wall Street is opening lower after a bill to provide emergency help to the economy stalled in Congress
9:39AM ( 54 minutes ago )
What you need to know today about the virus outbreak
A surge in infections has caused a critical shortage of medical supplies in many places
9:08AM ( 1 hour ago )
Pompeo in Kabul in effort to revive flagging peace process
U.S. Secretary of State Mike Pompeo is in Kabul on an urgent visit to try to move forward a U.S. peace deal signed last month with the Taliban
9:00AM ( 1 hour ago )
AP World News
Fallout of '08 bailout looms over Washington negotiations
More than a decade after Washington bailed out big banks, Congress and the White House are engaged in a new debate over emergency spending
9:36AM ( 57 minutes ago )
The Latest: Migrants stuck in Moscow as borders close
Hundreds of migrants from Central Asia are stuck in Moscow airports as countries close borders and airlines cancel flights amid the coronavirus pandemic
9:29AM ( 1 hour ago )
Germany OKs big aid package to help companies, self-employed
The German government has approved a massive new package of measures to cushion the devastating effects of the virus outbreak on the economy
9:28AM ( 1 hour ago )
AP Business
Syrians rush to stock up; Iran reports 127 more virus deaths
Syrians are rushing to stock up on food and fuel amid fears that authorities will resort to even stricter measures after reporting the first coronavirus infection in the country, where the healthcare system has been decimated by nearly a decade of civil war
6:14AM ( 4 hours ago )
Iran reports 127 more virus deaths; death toll now 1,812
Iran is reporting another 127 coronavirus deaths, bringing its death toll to 1,812 amid 23,049 confirmed cases
6:09AM ( 4 hours ago )
Syrians brace for lockdown after first virus case
Syrians are rushing to stock up on food and fuel amid fears that authorities will resort to even stricter measures after reporting the first coronavirus infection in the country, where the healthcare system has been decimated by nearly a decade of civil war
5:35AM ( 4 hours ago )
AP World News - International incidents
Presidents in health crises: Trump more hands-on than many
Most American presidents will confront a crisis — or crises — during their time in office, whether it is a natural disaster, war, economic downturn, public health threat or terrorism
6:24AM ( 4 hours ago )
Air Canada lays off 5,000, France tries to save food supply
Air Canada is laying off more than 5,000 flight attendants as demand plunges amid travel controls imposed to fight the coronavirus
6:14AM ( 4 hours ago )
Infantino eyes reboot for soccer to avoid crisis
FIFA president Gianni Infantino says the future of soccer could be fewer games and fewer top competitions to help avoid a financial crisis
6:08AM ( 4 hours ago )
AP Business - Economy
The Latest: White House urges labs to prioritize tests
President Donald Trump says he’s ordered the Federal Emergency Management Agency to ship mobile hospital centers to the hard-hit states of Washington, California and New York amid the coronavirus pandemic
6:37PM ( 15 hours ago )
The Latest: Trump says he ordered FEMA to help states
President Donald Trump says he’s ordered the Federal Emergency Management Agency to ship mobile hospital centers to the hard-hit states of Washington, California and New York amid the coronavirus pandemic
6:26PM ( 16 hours ago )
Scramble to prepare hospitals as deaths tolls worldwide soar
Italy, Iran and the United States reported soaring new death tolls as the coronavirus pandemic marched relentlessly across the globe
12:23PM ( 22 hours ago )
AP Business - Industries
PG&E reaches bankruptcy deal with California governor
California Gov. Gavin Newsom and Pacific Gas & Electric have reached a deal for the nation's largest utility to emerge from bankruptcy triggered by massive liabilities from wildfires
8:28PM ( 2 days ago )
Dow drops more than 900 points, ending worst week since 2008
Stocks sank to their worst week since the financial crisis of 2008 as traders went into full retreat out of fear that the coronavirus will plunge the U.S. and other major economies into deep recessions
5:56PM ( 2 days ago )
Stocks losses deepen, oil drops as virus clampdowns widen
Stocks are widening their losses and the price of oil is falling sharply again as clampdowns related to the coronavirus escalate
2:54PM ( 2 days ago )
AP Business - Utilities
War-torn Syria braces for lockdown after first virus case
Syrians are rushing to stock up on food and fuel amid fears that authorities will resort to even stricter measures after reporting the first coronavirus infection in the country
10:17AM ( 17 minutes ago )
Over 1.5 billion globally asked to stay home to escape virus
More than 1.5 billion people, a fifth of the world's population, are being asked or ordered to stay home as new virus infections soar
10:11AM ( 23 minutes ago )
India halts its crucial train network to try to stop virus
India has expanded its virus-containment measures and halted its train network, the country's lifeblood
10:05AM ( 29 minutes ago )
Fed to buy as much government debt as needed to aid economy
In its boldest effort to protect the U.S. economy from the coronavirus, the Federal Reserve says it will buy as much government debt as it deems necessary and will also begin lending to small and large businesses and local governments to help them weather the crisis
10:04AM ( 29 minutes ago )
Fitness enthusiasts think outside the gym during coronavirus
People around the country who are self-isolating or maintaining social distance during the coronavirus outbreak have to think outside the gym when it comes to their fitness routines
9:57AM ( 37 minutes ago )