China virus: how foreign firms are responding

Agence France-Presse

Posted at Jan 31 2020 08:06 AM

Travelers wear masks at Pearson airport arrivals, shortly after Toronto Public Health received notification of Canada's first presumptive confirmed case of coronavirus, in Toronto, Ontario, Canada Jan.25, 2020. Carlos Osorio, Reuters

LONDON - Given China's economic heft and position in the nexus of global supply chains, the new strain of coronavirus is affecting companies from far and wide in multiple sectors.

Here's how some multinational brands are responding to the deadly epidemic, which has forced China to extend its Lunar New Year holidays into next week, prolonging the annual closure for factories and offices: 

The travel sector is most directly affected by China's decision to lock down dozens of cities and ban overseas tour groups, in a bid to contain the outbreak.

Other countries have told their nationals to avoid travel to China, and several airlines are trimming back their schedules. British Airways and Lufthansa have gone the furthest by cancelling all their China flights.

Paris department stores, a de rigueur stop for Chinese tour groups, are unusually quiet. So are casinos in Macau. Disney has shuttered its theme parks in Shanghai and Hong Kong.

Several cruise-ships operators including MSC Cruises, Costa Cruises and Royal Caribbean have suspended services to China. 

Thousands of stranded tourists were free to disembark from a cruise ship at an Italian port after authorities said two Chinese passengers feared to have the coronavirus tested negative Thursday.

Club Med will close for several weeks six of its holiday villages in China and keep open only its Sanya resort on Hainan island. 

Cinemas around China have been forced to close, during what is meant to be a prime time for blockbuster releases during the holidays. Canada-based Imax Corp. could be deprived of $60-200 million in lost box-office revenues, according to analysts.


Taiwanese tech giant Foxconn is keeping its Chinese factories closed until mid-February and will allow local employees to delay their return after the new year break.

The move could affect global supply chains for tech companies that rely on Foxconn to manufacture everything from Apple's iPhones to flat-screen TVs and laptops.

For its part, Apple is working on "mitigation plans" to make up for any production loss from its suppliers in China, such as Foxconn. 

Wuhan, the central Chinese city that is ground zero of the outbreak, is a major hub for foreign carmakers. 

The holidays mean there is no immediate impact on their production, but concerns are growing about the longer-term effects, including on auto suppliers around China.

General Motors, Fiat Chrysler and Ford Motor have travel restrictions in place for their staff. Some such as Nissan have been evacuating staff from Wuhan. PSA, Renault and Honda all say they are monitoring the situation closely.

Electric pioneer Tesla, which has just started rolling out cars from a giant new factory in Shanghai, says the virus could delay a planned acceleration of production there, and potentially affect earnings this quarter.

Mainland China is the second-biggest market of US coffee chain Starbucks, with more than 4,000 outlets, and half of them have been closed by the outbreak.

Fast-food giant McDonald's has closed all of its "several hundred" restaurants in Hubei, the province of Wuhan, but some 3,000 others in China remain open.

Other brands such as Pizza Hut and KFC are also suffering closures in Hubei province imposed by their Chinese parent company.


Not all companies are suffering.

3M, a leading maker of protective face masks, is cranking up production and the world’s biggest glovemaker, Top Glove, expects sales to increase about 25 percent as people pay more attention to hygiene, according to Bloomberg News.
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