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How coronavirus outbreak is hitting companies around the world

Tom Belger
·Finance and policy reporter
·5-min read
SHANGHAI, CHINA - 2020/01/12: American coffee company and coffeehouse chain Starbucks logo seen in Shanghai. (Photo by Alex Tai/SOPA Images/LightRocket via Getty Images)
American coffee company and coffeehouse chain Starbucks logo seen in Shanghai. Photo: Alex Tai/SOPA Images/LightRocket via Getty Images

Starbucks became the latest multinational company to announce emergency measures over the coronavirus last night, temporarily shutting down stores in China.

The coffee chain said it had shuttered more than 2,000 stores in its second-largest market as the death toll rose above 130 from the outbreak.

A growing list of global firms have shut stores, suspended factory lines, cancelled services or ordered staff to work at home in a bid to contain the threat.

With stock markets sliding around the world this week, here are some of the ways major companies are making contingency plans, according to Reuters:

Shops and food outlets shut their doors

Starbucks (SBUX)’s decision in its fastest-growing market came after McDonald’s shut outlets in five cities in the Chinese province at the centre of the outbreak, Hubei.

Restaurant giant Yum China has already closed some KFC and Pizza Hut stores in Hubei’s provincial capital Wuhan.

Many retailers have also decided to shut up shop, with the province described as “under virtual lockdown” since the virus reportedly emerged in a wild animal market last month.

READ MORE: British Airways suspends China flights as cases mount to 5,700

H&M (HM-B.ST) has closed 45 stores and suspended business travel in China, Uniqlo’s owner Fast Retailing shut around 100 branches and Apple (AAPL) closed one. The iPhone maker also reduced hours at other branches as footfall has fallen.

Swatch closed five Wuhan stores, and Imax has even delayed some film releases in China.

Factories shuttered and fears for global supply chains

Several firms have extended holidays beyond the Chinese lunar new year holiday, which ends on 2 February.

Apple said it had alternatives to its suppliers in Wuhan, but supplier factories would not re-open until 10 February. CEO Tim Cook told Reuters it had used a wider-than-normal prediction range in its financial forecasts to reflect the potential hit from the delayed restart.

Bosch (BOSCHLTD.BO), the world’s largest car parts supplier, warned its own supply chains relied heavily on China, particularly for electric car parts. Its CEO said supply chains “will be disrupted” if the virus continued to spread. It has two plants in Wuhan.

Toyota Motors (TO) also halted production at factories in China and restricted its employees’ travel, and said it was assessing the virus’ potential impact on its parts supply chains.

Banks, tech and car firms quarantine staff and curb travel

Volkswagen (VOW.DE) ordered staff in China to work from home until 17 February, while Honda (HMC) and Nissan (NSANY) even flew workers home to Japan on a government-chartered flight.

Facebook (FB), HSBC (HSBC), UBS (UBS), Standard Chartered (STAN.L) and Goldman Sachs (GS) also told returning workers who had travelled to China to work remotely.

TikTok owner Bytedance said workers who had travelled should quarantine themselves at home for a fortnight.

HSBC, Exxon Mobil and Brazilian mining giant Vale SA also banned travel to Hong Kong and China.

Airlines take a hit as flights suspended

IAG-owned British Airways (IAG.L) announced on Wednesday it had halted direct flight bookings to Beijing and Shanghai, following other airlines in tearing up timetables.

Finnair, United Airlines, Air Canada, Air Seoul and Taiwan’s China Airlnies have also cancelled some flights.

Hong Kong’s flag carrier Cathay Pacific (CPCAY) and sister airline Cathay Dragon slashed at least half its flight capacity until the end of March. Staff were reported to have been offered months of unpaid leave.

Taiwan’s China Airlines scrapped hot meals, blankets and newspapers on flights to protect customers and crew, encouraging passengers to bring their own drinks bottles.

READ MORE: Hong Kong stocks slump on coronavirus travel lockdown

The US government decided against suspending all flights, but is said to be still considering a ban.

The airline industry is bracing for a financial hit as after the SARS outbreak in the early 2000s, with some forecasts for Chinese growth sliding.

Consultancy Boyd Group International said it had slashed its 8.1% prediction for airport traffic growth in China by more than half.

Fuel producers could also feel the pinch, with jet fuel prices dropping and some 2020 forecasts for oil and jet fuel demand also sinking.

Hotels and travel firms refund cancelled trips

A man with a child walk past Grand Hyatt Hotel near Chang'an Avenue ahead of the 70th anniversary of People's Republic of China in Beijing, China September 19, 2019. Picture taken September 19, 2019. REUTERS/Florence Lo
Grand Hyatt Hotel in Beijing, China. Photo: REUTERS/Florence Lo

Falling passenger numbers is hitting not only airlines but also the wider travel industry.

The Foreign Office has urged UK citizens to avoid mainland China for all but essential travel.

Hyatt Hotels (H) said guests were cancelling because of the outbreak, and some European tour operators have cancelled trips scheduled in China.

Intercontinental Hotels (IHG.L) said it would let customers cancel or re-book stays across China booked up to 3 February.

China’s biggest online booking giant Ctrip reported thousands of Chinese hotels on its site had agreed to refund cancelled bookings up to 8 February.

Multiple cruise lines are also reported to have suspended cruise journeys scheduled to stop off in China this week.

Scientists race to create a vaccine

Pharmaceutical giant Johnson & Johnson announced it had launched a project hoping to develop a vaccine “with the potential to protect people against the disease.”

“In order to meet the needs of this outbreak, we have dozens of scientists working tirelessly on this effort right now,” said its chief scientific officer Paul Stoffels.

Meanwhile China’s Tsinghua University said it had dropped its paywall for a giant scientific database to give access to researchers around the world.

Another team at the Peter Doherty Institute for Infection and Immunity in Melbourne, Australia, said they had developed a lab-grown version of the new virus and would share it with laboratories around the world.