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The number of U.S. cases of the coronavirus that causes COVID-19 edged closer to 400,000 on Wednesday, as companies continued to cut costs and furlough workers as they close offices and idle plants to prevent the spread of the deadly illness.
In China, the city of Wuhan’s mandatory lockdown lifted, opening the door to a return to some sort of normalcy in the place where the novel coronavirus was first detected. The city had the highest number of deaths from the virus in China, with 80% of the country’s reported deaths taking place there.
Wuhan shut down in large part on Jan. 23. Today, traffic checkpoints will be taken down, and trains and buses will start operating, the government said. Still, schools remain closed, and residents have been instructed to minimize travel and continue to wear masks in public.
In Europe, Spain remained ahead of Italy in its number of cases, although Italy continues to have the highest number of fatalities in the world, according to data aggregated by the Center for Systems Science and Engineering at Johns Hopkins University. Spain recorded 757 deaths in the last 24 hours, according to the national health ministry, rising for a second straight day after three days in which the rate declined.
The World Health Organization said it is “deeply concerned” about the spread of the virus in Europe, which now accounts for about half of all confirmed cases globally, and urged governments to keep up containment measures.
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In the U.K., Prime Minister Boris Johnson remained in an intensive-care unit for a second day. London Mayor Sadiq Khan said the country is nowhere near lifting its lockdown.
Johnson was said to be responding by Wednesday to COVID-19 treatment.
The U.K. has had 55,957 confirmed cases and 6,171 deaths, according to the Johns Hopkins data.
The U.S. suffered its worst single-day death toll from the virus on Tuesday, when almost 2,000 people died. The U.S. has had 399,929 cases confirmed, with at least 12,911 deaths, while another 22,539 people have recovered. New York state remains the epicenter of the outbreak, and New York City now has had more fatalities than were suffered in the terrorist attacks of Sept. 11, 2001.
There are 1.45 million cases of COVID-19 worldwide, according to the Johns Hopkins data. At least 83,471 people have died, and another 308,125 have recovered.
Spain’s tally rose to 146,690 cases and at least 14,555 deaths. Italy has 135,586 cases and at least 17,127 fatalities. France has 110,070 cases and at least 10,343 deaths, while the German tally comes to 107,663 cases and 2,016 deaths.
China has 82,809 cases and 3,337 deaths. Iran, another hot spot, has 64,586 cases and 3,993 deaths.
President Donald Trump on Tuesday accused the WHO of being China-centric as he criticized the U.N. health agency’s response to the crisis and threatened to cut off funding. Trump then contradicted his own message and said he would merely look into ending funding. Trump accused the WHO of failing to take sufficiently aggressive action to contain the virus, especially in the early stages — the precise criticisms that have been leveled at his administration.
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An ABC News report said Trump’s top trade adviser, Peter Navarro, wrote memos in late January warning of the devastation a pandemic would create for Americans and their finances. Trump said Tuesday he had never seen those memos.
The president acknowledged that the virus is hitting the African-American community especially hard, and accounting for a disproportionate number of deaths. Dr. Anthony Fauci, head of National Institute for Allergy and Infectious Diseases, said the data “shines a bright light” on the health disparity between white and black people, with the latter suffering higher levels of diseases such as diabetes, hypertension, obesity and asthma.
Unfortunately, these diseases often lead to a bad outcomes with the coronavirus — the very conditions that gets people into intensive-care units, require ventilators and often lead to death, Fauci said.
John Chambers, the legendary tech executive–turned–venture capitalist, said he predicts the health and economic crises will take three to five quarters to run its course, and any economic uptick won’t occur until at least late fall. A full recovery would be unlikely to happen until early 2021, Chambers warned in an interview with MarketWatch’s Jon Swartz.
The pandemic will test those companies that have failed to make the full move to the digital age; some will be destroyed, while others will boom, he said.
In a show of solidarity, Twitter co-founder and Chief Executive Jack Dorsey said he would contribute $1 billion of his stock in Square, the payments company that he founded and also leads, for COVID-19 relief efforts. Dorsey, on his Twitter feed, said he was moving $1 billion of his Square shares, or about 28% of his net worth, to Start Small LLC for pandemic relief. Dorsey said “after we disarm this pandemic,” the foundation will focus on girl’s health and education, and universal basic income, with fund flows to be tracked in a Google docs spreadsheet.
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Here’s what companies had to say about COVID-19 on Wednesday:
• Alpha Pro Tech Ltd APT, +7.54%, a maker of products aimed at protecting people, including personal protective equipment and building products, has booked about $36.7 million of orders for its N95 face masks between January and April. The Canadian company, which operates out of Nogales, Arizona in the U.S., said that’s up 62% from the same time a year ago and it continues to see strong demand for the masks that can filter out airborne particles. The company is ramping up production and expects a phase 2 expansion to be operational by late summer. The company has also see a steep rise in demand for face shield products and gowns, lab coats, shoe covers and bouffant caps, which are made by a joint venture in India that is currently in lockdown.
• Arconic Corp. ARNC, +8.35% is targeting a 10% reduction in its salaried workforce, as it looks to cut costs amid a decrease in demand resulting from the pandemic. The aluminum sheet provider had 15,400 employees worldwide in 2019. Arconic is cutting Chief Executive Timothy Myers’ salary and the board of directors’ annual cash retainer by 30% and senior-level management salaries by 20%, and suspending the 401(k) match for salaried employees. New York and Tennessee facilities have been idled “until demand returns,” other U.S.-based rolling and extrusion facilities will reduce production and rolling mill facilities in Europe, China and Russia will modify schedules.
• Berkshire Hathaway Inc.’s BRK.A, +2.53% BRK.B, +2.12% Geico insurance will give its automobile and motorcycle policyholders a 15% credit on their bills as their policies come up for renewal between Wednesday and Oct 7. The credit will also apply to new policies bought in the same period. The average auto policy has a six-month premium around $1,000, and generally covers more than one vehicle, so it expects to credit on average about $150 per auto policy and about $30 per motorcycle policy. The benefit to its 18 million auto and 1 million motorcycle customers will be around $2.5 billion. “Shelter-in-place policies have reduced driving significantly,’ and vehicle accidents are down sharply. Geico in March said it was pausing coverage cancellations due to non-payment and policy expiration through at least April 30. Allstate Corp. ALL, +2.64% and privately held American Family Mutual Insurance Co. on Monday announced similar credits due to pandemic.
• Dick’s Sporting Goods Inc. DKS, +6.75% will be furloughing a “significant number” of employees who work at its retail stores, distribution centers and its corporate headquarters starting April 12. The furloughs are a result of uncertainty surrounding the duration of the store closures given the COVID-19 pandemic. Dick’s said it will continue to provide benefits to furloughed employees. Other actions previously taken include suspending share repurchases, cutting capital expenditures and reducing salaries of executives, senior leadership and certain other employees.
• General Motors Co. GM, +4.53% is working with “speed and urgency” with Ventec Life Systems to produce ventilators for patients suffering from the coronavirus. The work is part of its contract with the U.S. Department of Health & Human Services and comes after President Donald Trump invoked the Defense Production Act to make U.S. manufacturers help make up the shortfall in medical equipment during the pandemic.
• JetBlue Airways Corp. JBLU, +1.59% is consolidating operations in Boston, Los Angeles, New York City, San Francisco and Washington, D.C., and will only operate out of one or two airports in those metro areas from April 15 to June 10. The airports the airline is suspending are T.F. Green International Airport (PVD) around Boston; Hollywood Burbank Airport (BUR) and Ontario International Airport (ONT) around LA; LaGuardia Airport (LGA), Westchester County Airport (HPN) and Stewart International Airport (SWF) around NYC; San Jose Airport (SJC) around San Francisco; and Baltimore/Washington International Thurgood Marshall Airport (BWI) near D.C.
• McDonald’s Corp. MCD, +1.12% has raised $6.5 billion in cash in the debt markets during the first quarter. McDonald’s expects to report $40 million in costs to cancel its Worldwide Owner/Operator Convention and $35 million in costs related to reducing technology investments. The company is scheduled to report first-quarter earnings on April 30. McDonald’s has withdrawn its 2020 outlook, and Chief Executive Chris Kempczinski has halved his base salary from April 15 to September 30. Other named executives have reduced their base salaries by 25%. Three-quarters of McDonald’s restaurants around the world are operational, the company said, but many are takeaway, delivery or drive-through only.
• Party City Holdco Inc. PRTY, -9.47% stores will remain closed until further notice. The retailer has furloughed 90% of its store staff, as well as 70% of manufacturing, wholesale and corporate staff. Party City has 18,300 employees, according to FactSet. Party City will continue to pay health benefits and has set up a fund for workers experiencing economic hardship. Chief Executive Brad Weston will halve his base salary, Chief Financial Officer Todd Vogensen take a 30% pay cut and the remaining senior executives will reduce their base pay by 15% to 20%. The board will also forego their second-quarter cash retainer. The company is slashing its 2020 capital expenditures
• Perrigo Co. PRGO, +3.08% saw a first-quarter sales boost due to the COVID-19 pandemic. The over-the-counter drug maker said it expects adjusted operating income of $220 million to $225 million on revenue of about $1.3 billion. Analysts surveyed by FactSet expect adjusted operating income of $195 million, or earnings of 96 cents a share, on revenue of $1.26 billion.
• Rockwell Automation Corp. ROK, +4.51% is taking several actions to mitigate the negative effects of the pandemic, with an aim to minimize job cuts, including suspending bonus payouts for 2020, eliminating discretionary spending and cutting salaries of its executives. The industrial automation company is cutting Chief Executive Blake Moret’s salary by 25% beginning in May, cutting salaries of all senior vice presidents by 15% and reducing salaries of all other non-manufacturing employees by 7.5%, while the board of directors have reduced cash fees by 50%. Manufacturing employees will not have their pay cut, and will receive a one-time additional payment.
• Spirit AeroSystems Holdings Inc. SPR, +11.24% is taking a series of measures to cut costs after Boeing Co. BA, +6.22% suspended all deliveries to its Washington state and South Carolina facilities until further notice. Measures include cutting 2,800 workers at its Wichita, Kansas operations and cutting 400 workers in Oklahoma. The company has launched a voluntary early retirement program for 850 hourly and salaried workers. It has deferred $120 million in capital expenditures and negotiated an amendment to credit facilities that will offer covenant relief into 2021. The company has secured a $375 million short-term delayed draw term loan facility. It has cut its dividend to a penny a share and will continue to suspend share buybacks. Pay for all U.S. executives has been cut by 20% until further notice and the company has furloughed all production workers and managers in Wichita, Kan., and in Oklahoma that support Boeing programs. The company had a cash balance of about $1.83 billion as of April 2 and a debt balance of about $3.04 billion, Its $800 million revolver remains fully drawn.
• Tesla Inc. TSLA, -0.03% will cut salaries and furlough nonessential workers at its U.S. facilities until they are able to reopen amid the coronavirus pandemic, the tech news site Protocol reported. According to an internal email obtained by Protocol, furloughs will begin Monday, with the goal of ending May 4 if factories reopen then as scheduled. Salaried employees will see temporary 10% pay cuts, while directors’ pay will be cut 20% and executives at the level of vice president and above will see 30% cuts, Protocol reported. Tesla announced in late March that it would temporarily shut its Fremont auto factory and Buffalo, N.Y., solar-panel factory to limit the spread of COVID-19, and last week sharply scaled back operations at its Nevada gigafactory. The Buffalo plant may soon reopen to manufacture ventilator components.
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• TJX Cos. TJX, +6.38% is implementing temporary furloughs for most of its retail store and distribution center employees after April 11, as a result of continued store closures. The apparel and home furnishings retailer will provide benefits to eligible employees at no cost during the furlough period, the duration of which is still uncertain. Chief Executive Ernie Herrman and Executive Chairman Carol Meyrowitz have agreed to have their base salaries reduced by 30% for a defined period, from April 12 to July.
