Coronavirus halts production at UK's largest car factory
Rob Davies
Nissan’s Sunderland car plant in Sunderland. Photograph: Oli Scarff/AFP/Getty Images
Britain’s biggest car plant, Nissan’s factory in Sunderland, has halted production amid the chaos caused by the coronavirus outbreak.
The decision, which came a day after Vauxhall stopped work at its Ellesmere Port and Luton sites temporarily, means 7,000 staff will stop working.
Nissan said disruption to the global economy could force it to take further steps, although it did not say whether this could involve job cuts.
The Japanese company said in a statement.
“Further measures are currently under study as we assess supply chain disruption and the sudden drop in market demand caused by the COVID-19 emergency,”
Facebook offers cash and ad credits to struggling firms
Alex Hern
Facebook will hand out $100m in cash and ad credits to more than 30,000 small businesses in 30 countries, as coronavirus continues to hit the economy around the world, Sheryl Sandberg said today.
“We’ve listened to small businesses to understand how we can best help them,” the Facebook COO said.
“We’ve heard loud and clear that financial support could enable them to keep the lights on and pay people who can’t come to work.”
The company has also promised a $1,000 bonus to every employee, according to a report from The Information, with Mark Zuckerberg saying that the company wants to support employees working remotely because of the pandemic.
It’s a reminder that central banks and governments can do more - although clearly we need a LOT more action to prevent a deep recession.
The FTSE 100 has gained 1%, with similar gains in Germany and Paris.
Photograph: Refinitiv
UK and European multinationals are also being boosted by currency moves - with the pound and the euro both sliding over 2% against the US dollar today.
Federal Reserve moves to support short-term corporate debt market
Newsflash: America’s central bank has launched a new facility to help struggling companies issue debt to ride out the downturn.
The Federal Reserve is creating a Commercial Paper Funding Facility (CPFF) to support the flow of credit to households and businesses.
This facility will allow the Fed to buy up short-term debt issued by companies, who are looking to raise cash to cover short-term funding needs. It says the move will protect companies, and save jobs.
A similar programme was launched during the 2008 financial crisis - the last time America’s economy was in such a tough situation.
The commercial paper market has become gummed up in recent weeks. Struggling companies have been trying to issue more short-term debt, just as buyers have been withdrawing from the money market funds on fears that firms may be in trouble.
By pledging to buy commercial paper itself, the Fed is trying to eliminate the risk that eligible issuers will not be able to repay investors by rolling over their maturing commercial paper obligations.
The Fed says:
Commercial paper markets directly finance a wide range of economic activity, supplying credit and funding for auto loans and mortgages as well as liquidity to meet the operational needs of a range of companies. By ensuring the smooth functioning of this market, particularly in times of strain, the Federal Reserve is providing credit that will support families, businesses, and jobs across the economy.
US treasury secretary Steve Mnuchin has given his approval for the move:
The Fed will restart a financial crisis-era program to help U.S. companies borrow through the commercial paper market after it came under “considerable strain” due to the coronavirus pandemic
Mnuchin in a statement said he wrote to Powell that he approves of the move.
Morrisons to hire 3,500 to handle demand amid coronavirus crisis
Amid the gloom in the UK economy, a ray of light.
UK supermarket group Morrisons has announced it will recruit 3,500 new staff - and boost its home delivery service, to cope with the surge of demand due to the coronavirus.
It plans to hire 2,500 order pickers and drivers to support home delivery, plus 1,000 more people to work in its distribution centres.
This will help it offer more delivery slots; it’s also launching a new range of food parcels from March 23.
Chief executive David Potts.
“We expect the days, weeks and months ahead to be very testing and we are determined to do our bit.”
Shares in UK broadcaster ITV have fallen 10% today, after the Euro 2020 football tournament was officially postponed until 2021.
ITV the postponement will actually save up to £50m in costs, with “no loss of sponsorship revenue as the tournament is pre-sponsored”.
But it still a blow to broadcasters in the short term, given football’s popularity:
Well there go. With Euro 2020 pushed to next year ITV's share price has hit a 10-year low. Tens of millions worth of advertising and sponsorship vaporised for this year. pic.twitter.com/Sw03WWNeyK
ITV has said that NOT airing Euro 2020 will save it £40m to £50m in programming costs, including the cost of replacement programming. However, the tournament is a huge driver of audiences and advertising for the wider business.https://t.co/ewfgXm76vG
British cinema chain Everyman Media Group is also locking its doors due to the Covid-19 crisis, joining Odeon, Cineworld and Vue today.
And Everyman has also moved to shut its venues, pretty much marking the end of all cinema in the UK and Ireland for the forseeable future. https://t.co/tGrgSJs1Ci
Away from Wall Street, Moody’s has cut easyJet’s credit rating from Baa1 to Baa2 (that’s just two above junk status).
It has also put British Airways’ rating on review, along with parent company IAG.
Moody’s says:
“The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets.
The combined credit effects of these developments are unprecedented. The passenger airline sector has been one of the sectors most significantly affected by the shock given its exposure to travel restrictions and sensitivity to consumer demand and sentiment.”
The markets have already reached the same conclusion - easyJet’s shares have more than halved in the last month, from £15 to £6.
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