Companies hit pause button as coronavirus infects economy

Govts have pledged hundreds of billions to help virus-hit firms limp along

PARIS: Layoffs, cutting costs and halting dividends... companies are scrambling to adapt as the coronavirus emergency hits demand while the draconian measures taken to contain the illness undercut production.

With the economic impact of COVID-19 threatening the survival of many firms, governments have pledged hundreds of billions to help them limp along – or failing that, to bankroll outright rescues or nationalisation, if necessary.

Here are some measures companies have taken.

Several industrial giants, in particular in the automobile industry, have reduced or even suspended production.

America’s “Big Three” carmakers – General Motors, Fiat Chrysler and Ford – are temporarily halting operations throughout North America through the end of the month, the companies said in conjunction with the auto workers union.

Most European carmakers, including Daimler, Volkswagen, BMW, Renault, Peugeot Citroen and Fiat Chrysler have shut down most, if not all, of their manufacturing lines.

Nissan and Ford have also shut facilities in Europe.

Scania, part of Volkswagen’s Traton group, is halting most European truck production following disruptions in the supply chain.

Tyre giant Michelin is halting production in Spain, France and Italy for at least a week.

Airbus said it was suspending work at its French and Spanish plants for four days to improve workplace safety.

High-end fashion giant Gucci, part of the Kering group, is closing all sites until March 20, while Hermes is shutting its manufacturing sites until the end of March.

The situation is especially catastrophic for the travel industry, with US hotel giant Marriott shutting down some of its properties and furloughing tens of thousands of workers.

Airlines have been hit by a double-whammy - plunging demand and sweeping travel restrictions imposed by governments. They have taken different measures to adapt.

Russia’s Aeroflot has asked employees who have accumulated extra time off to use it.

Air France says it will look at reducing working hours, which several countries have facilitated with easier access to state benefits for workers now forced to go part-time.

Low-cost airline Ryanair, which has announced “most if not all” of its flights from March 24 will be cancelled, said it is looking at a similar move, along with voluntary departures and temporarily suspending work contracts.

Forcing workers into unemployment temporarily is also an option several countries have made easier, with Volkswagen’s Spanish subsidiary Seat also taking that course.

Italian shipyard Fincantieri, which has also halted output, has asked its workers to use their annual leave.

UK mobile phone retailer Dixons Carphone, however, is axing 2,900 jobs as it faces “turbulent times”.

Firms have also moved swiftly to cut costs.