https://www.supplychainbrain.com/art...lobal-business
For global corporations, Wuhan is an important hub. Of about 2,000 cities in China with factories and other facilities in Bloomberg's supply chain database, the city ranks 13th, with about 500 facilities. The province of Hubei has 1,016, making it seventh of 32 such jurisdictions. U.S.-based companies have 44 facilities there, and European ones about 40, the data show. Many plants are in the auto and transportation industries, and big names include PepsiCo Inc. and Siemens AG.
As the death toll from the pneumonia-like illness rises and cases are found in neighboring Asian countries, including South Korea and Singapore, as well as in the U.S., the economic impact of the novel coronavirous could be widespread.
Here is a rundown of what big companies are saying so far about the impact.
Jan. 26:
Honda Motor Co.
The automaker will evacuate from Wuhan about 30 Japanese staff, family members and employees visiting on business trips, Teruhiko Tatebe, a Tokyo-based spokesman, said by phone. The carmaker has informed the Japanese government that it wishes to utilize the charter jet planned to evacuate Japanese citizens. A handful of staff needed to maintain local operations will remain in the city.
Jan. 25:
Groupe PSA
The French maker of Peugeot cars and other brands said it will evacuate its expatriate staff and their families from the Wuhan area. A total of 38 people will leave, the company said in a statement.
Hennes and Mauritz AB
The clothing retailer better known as H&M has closed a total of 13 stores in the region. Svenska Dagbladet reported. China is the companyâs 5th biggest market in terms of revenue, with 524 stores as of Aug. 31.
Ikea closed its warehouse in Wuhan on Thursday, according to the same report.
Jan. 24:
Remy Cointreau SA
The French cognac maker abandoned its forecasts for this year after a slump in Hong Kong dented sales in the Christmas period and as the viral outbreak threatens business in China, the source of 20% of its profit, according to Jefferies estimates. âClearly we are concerned,â Chief Financial Officer Luca Marotta said of the coronavirus on an earnings conference call. âWe do not have any scenarios on a quantified basis. It is evolving hour after hour.ââ
McDonaldâs Corp.
The fast-food giant, which had about 3,000 stores in China at the end of 2018, temporarily closed locations across five cities of the Hubei province due to the virus, including Wuhan. The Chicago-based company is taking extra preventative measures in the rest of the country, including taking the temperature of workers upon arrival and giving out hand sanitizers to diners.
Walt Disney Co.
The worldâs largest theme park operator said it would close its Disneyland resort in Shanghai effective Jan. 25. The company is offering refunds to guests who bought theme park tickets or reserved rooms in its hotels. âWe will continue to carefully monitor the situation and be in close contact with the local government, and we will announce the reopening date upon confirmation,â it said in a statement.
Starbucks Corp.
The Seattle-based chain, with about 4,100 cafes in China, also said itâs closing some locations, without providing more details.
Delta Air Lines Inc.
The Atlanta-based carrier issued a travel waiver that allows passengers traveling to, from or through Beijing and Shanghai between Jan. 24 and Jan. 31 to change their itinerary once without having to pay a fee.
Wynn Resorts Ltd.
The Chinese Lunar New Year is peak time for profits at casino operators. Authorities in Macau, the worldâs largest gambling market, are requiring casinos to screen guests for high temperatures and make their staff wear respirator masks. Many Chinese tourists are also heading to Las Vegas to celebrate. âAlthough as of this date there are no reported cases of the coronavirus in Las Vegas that we are aware of, we will be in close contact with the Southern Nevada Health District who is monitoring the situation along with the CDC,â the company said in a statement. âWe will implement any health directive they issue.â
Jan. 23:
Avnet Inc.
The Phoenix-based distributor of computer products and semiconductors said it hadnât seen an impact so far. âBut if it gets worse and they start shutting down airplanes, et cetera, then that will have a different effect on shipments out of China,â CEO Bill Amelio said on a conference call. Asked whether the area is a meaningful region from an electronics manufacturing perspective, Amelio answered: âOf course, it is.ââ
American Airlines Group Inc.
President Robert Isom said it is too soon to see an impact. âOur network isnât that extensive in Asia. But weâre on top of it,â he said on a conference call. âWeâve seen viruses in the past that weâve had to make accommodations for and to be prepared for, weâre doing all those same things right now.â
Keppel Corp.
The Singapore-based owner of the largest oil-rig builder, which has about 170 employees in Wuhan and operations across China, said it hadnât seen a direct impact either. âWe have advised our operations there and our staff there to take the necessary precautions. We are watching this very closely,â CEO Loh Chin Hua said on an earnings call.
Jan. 22
United Airlines Holdings Inc.
The U.S. carrier was among the first global corporations to comment on the coronavirus on an earnings conference call. âWeâve been coordinating closely with the CDC to ensure that weâre taking all the necessary steps to ensure that our customers and employees can travel safely,â CEO Oscar Munoz said. âBy working closely together, we have in the past effectively managed situations like this.â
Jan 30, 2020, 05:40am
Coronavirus And China Manufacturing: Why The Risk Is Far Larger Than Just Wuhanâs Factories
https://www.forbes.com/sites/willysh.../#12ccfe4555fb
Appleâs earnings forecast range for the current quarter is âwider than usual,â thanks to the uncertainty around the Wuhan coronavirus (
2019-nCoV) outbreak. That is because the vast majority of
Appleâs assemblers and suppliers are in China, as is the case for many firms. Even if you donât assemble finished product in China, you might be dependent on a supplier based there for components. Many people have been looking at whether firms have suppliers in Hubei Province where Wuhan is located, because they think these will be the supply chains that are impacted first.
But thatâs not the right way to look at this problem. The right question is who has a factory in their supply chain for which there are employees
who went home to Wuhan or any of the other cities with significant numbers of infected people for the Lunar New Year? And what will happen when they start to come back, whenever that turns out to be?
For businesses, virus in China fans fear and uncertainty
https://apnews.com/439351dab5d6e9bd5231f4ab660fef78
McDonaldâs has shuttered restaurants in five Chinese cities, including the inland port city of Wuhan where the crisis is centered. Shanghai Disneyland has temporarily closed as a precaution. Restrictions on travel and fears of flying to the region are threatening to depress demand for oil and jet fuel just as Chinaâs Lunar New Year is beginning.
In a sign of Chinaâs vast economic reach, even niche companies in America have begun feeling squeezed. In Houston, Rockstar Wigs worries that production delays in China will hold up shipments. Omaha, Nebraska-based Home Instead Health Care has stopped sending caregivers to the homes of elderly clients in Wuhan.
So far, there are 830 confirmed cases of the virus and 26 deaths. Wuhan and 12 other Chinese cities are on lockdown, isolating a combined population of more than 36 million.
âPersonally, I now cannot go to Wuhan to negotiate new orders, meet with new vendors, take foreign companies for supplier visits, and visit trade shows,â said Stanley Chao, a consultant in Rancho Palos Verdes, California, who helps foreign companies do business in China. âI may lose three to five trips to China, which is my bread and butter. In turn, my team in China cannot work, and I may have to temporarily lay them off for a while.â
The growing fears over the virus rattled financial markets Friday. The Standard & Poorâs 500 stock index endured its worst day since early October and snapped a two-week winning streak. The S&P index fell 0.9% after having been down as much as 1.3% earlier. Shares in airlines and other companies in the travel and tourism industries, which stand to be among the hardest-hit sectors if the crisis worsens, fell sharply.
So far at least, the virus appears to be less lethal than the SARS outbreak of 2003, which killed hundreds, though it is too soon to say for sure. And Beijing has apparently been more forthcoming about the health risks this time, leaving less room for panic-inducing rumors to take hold.
âThe authorities are sharing more information,â said Kent Kedl, partner at the consultancy Control Risks responsible for Greater China. âTheyâre getting out in front of it.ââ
Moreover, because the outbreak coincides with the Lunar New Year holiday, many businesses are closed as tens of millions of migrant workers return from big cities to their hometowns in the countryside.
Still, Wuhan is a central hub for China. Isolating the region could devastate Chinese production in automobiles, aviation, high-tech mechanical and electrical manufacturing, said Ahmed Rahman, an economist at Lehigh University.
âIts central role in facilitating exchange between the Chinese hinterlands and the rest of the planet cannot be overstated,â Rahman said. âArguably, out of all the regions of China, closing off Wuhan may be the most disruptive to the global economy.â
KFC and Pizza Hut restaurants are also closed in the city of Wuhan until further notice. Parent company Yum China (YUMC) says that it will continue to evaluate the need for "additional actions."
McDonald's (MCD) has shut restaurants in Wuhan and four other cities in Hubei.
Disney (DIS) has closed its parks in Shanghai and Hong Kong, just as the resorts were gearing up to usher in what it called the "Year of the Mouse," a play on China's Year of the Rat. Disney had put up new Chinese New Year-themed decorations throughout the parks, launched new merchandise and introduced several Lunar New Year dining options.
Shares in luxury goods companies have taken a hit on concerns about lower sales during what is usually a busy shopping season. The stocks of LVMH (LVMHF), Kering (PPRUF) and Cartier watch maker Richemont all fell more than 5% last week.
Tourism could be hurt, too, because of the regionâs many flights to Bangkok and Tokyo.
Many businesses are scrambling to contain the potential damage.
McDonaldâs said it has closed all of its restaurants in five cities in Hubei province â Wuhan, Ezhou, Huanggang, Qianjiang and Xiantao â until further notice. Its operations are running in other cities in Hubei where public transportation is available.
The fast-food giant is also taking the temperature of all employees when they arrive at work and sending anyone with a fever or cold symptoms home. Delivery drivers are required to wear masks. McDonaldâs is also disinfecting high-contact surfaces more frequently at its Chinese establishments, including tables, chairs door handles and self-ordering kiosks.
The Shanghai Disney Resort announced Friday that it is temporarily closing Shanghai Disneyland âin response to the prevention and control of the disease outbreak and in order to ensure the health and safety of our guests.âł
Ford, General Motors and Fiat Chrysler all have restricted travel to Wuhan and other parts of China affected by the virus. Most auto factories, though, remain closed for the Chinese New Year and havenât been affected yet. Ford said in a statement that it has a special team monitoring the situation.
Fiat Chrysler has banned corporate travel in areas locked down by the Chinese government due to the virus, while GM has restricted travel to all of China unless it is âbusiness critical and approved in advance,â a company statement said.
Home Instead Senior Care, based in Omaha, Nebraska, which sends caregivers to tend to elderly clients, has suspended service to its six or seven clients in Wuhan â after arranging for their families to take care of them. The company has 70 clients in the southern city of Shenzhen, where the virus has yet to strike. But worried clients there are already telling caregivers to avoid public transportation. âThe clients are saying, âTake a taxi so youâre not at riskââ of infection, said company spokeman Dan Wieberg.
At family-owned Rockstar Wigs in Houston, the operations manager, Anna Reger, said she worries that âthis could really put us behind this year.â
The companyâs wigs, which range from platinum drag queen classics to neon Halloween specials, are hand-stitched with custom designs and special fibers in several Chinese factories where work is currently on hold.
Reger said the company typically starts on thousands of wigs right after Chinese New Year, seeking to be well stocked throughout the year and especially in time for Halloween. She said sheâs hoping Chinese authorities can resolve the problem soon.
âIâm not going to let it stress me until we know what weâre dealing with.â
The outbreak arrives just after the United States and China reached a truce in an 18-month trade war that involved the two worldâs two biggest economies burying each otherâs products in tariffs.
Stuart Shulman, president of Synchronis Medical in Ann Arbor, Michigan, said the Wuhan shutdown is âthe double whammy.â Already reeling from tariffs that have devoured as much as 30% of his profits, he now may not have any workers at the Chinese factory where medical gowns are cut and sewn.
âThe timing is so catastrophic. I donât think a lot of people understand the situation,â Shulman said. Because workers have left for the new year holiday, they may not be able to get back to work.