Twitter’s Dorsey sets up $1B fund; consumers get some breaks
The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Tuesday related to the global economy, the work place and the spread of the virus.
CUSTOMERS FIRST: The pandemic is sapping trillions from the economy and the ramifications for businesses, from banks to restaurants, is severe. Some companies have also recognized their customers are suffering and extended a hand.
— Allstate is sending shelter-in-place paybacks to customers, with most getting checks for 15% of their monthly premium in April and May. Auto and home owners customers with financial difficulties can delay two consecutive premium payments. Some will be allowed to pay what they can afford. The insurer is sending out $600 million to customers, according to a regulatory filing.
— JPMorgan Chase has done away with minimum payment requirements on credit cards and it’s waiving late fees. The bank will not report payment deferrals, such as late payments, to credit bureaus for up-to-date clients.
JOBS FALLOUT: Few industries have been spared from mass layoffs, particularly manufacturers and restaurants devastated by social distancing.
— BJ’s Restaurants is laying off about 16,000 workers.
— Nissan is furloughing about 10,000 workers as it extends a production suspension until at least April 27.
— Honda will stop paying its roughly 14,400 production workers in Ohio, Indiana, Alabama, Georgia and South Carolina as it extends a production shutdown through May 1. Workers are getting health insurance and other benefits.
— Thousands of Spirit AeroSystems employees are being furloughed for three weeks without pay. Most managers and hourly employees at Spirit, Wichita’s largest employer, will be placed on unpaid leave Wednesday. Spirit has been hammered by problems at Boeing and its troubled 737 Max aircraft.
— T.J. Maxx’s parent says it will be furloughing the majority of its hourly workers in its stores and distribution centers in the U.S. and Canada after Sunday. The company also operates such chains as Marshalls and HomeGoods. As of Feb. 1, TJX Cos. has a global workforce of 286,000, mostly in the U.S. That’s more than double Macy’s workforce.
DORSEY’S FUND: Twitter CEO Jack Dorsey is setting aside $1 billion in stock to establish a philanthropic venture focused initially on global relief efforts for the COVID-19 pandemic. Dorsey, who is also CEO of the financial-payments startup Square, will bequeath the new venture shares from his Square holdings.
Dorsey announced the new venture, called Start Small, in a series of tweets, and said the contribution amounts to 28% of his fortune. The organization will disclose all transfers, sales and grants on a public Google Doc spreadsheet.
Start Small won’t be limited to COVID-19 work. “Once we have disarmed this pandemic,” he wrote, the organization will shift its focus to girls’ health and research into universal basic income, the idea that governments should guarantee a minimum income for all citizens.
AIRLINES: A steep decline in travel has pushed airlines to cancel flights, run fewer planes and seek government aid. Some additional hurdles they have to contend with are rules governing the sector.
— The Transportation Department gave smaller airlines a slight break in rules covering minimum service they must provide to get federal aid. The rules published Tuesday will let airlines drop flights to some airports if they serve one nearby. The department set more restrictive rules for the biggest four U.S. carriers – Delta, American, United and Southwest – to maintain flights.
— United Airlines is cutting more flights in San Francisco and Los Angeles for at least three weeks because of falling demand for travel. United’s president said last week the airline is losing $100 million a day.
UNCONFIRMED: Misinformation and sketchy facts about the virus, and potential cures, are also spreading fast. Of course, social media has become the conduit in many cases.
— WhatsApp tightened restrictions on message forwarding to cut down on coronavirus-related misinformation. The Facebook company on Tuesday said users getting a “frequently forwarded” message — one already shared by five or more people — will only be able to send it to one chat group at a time.
WhatsApp said in a blog post that “we’ve recently seen a significant increase in the amount of forwarding which users have told us can feel overwhelming and can contribute to the spread of misinformation.”
TESTING: There has been a lot of criticism over the failure in the U.S. to secure widespread testing for the coronavirus. The volume remains far from what medical experts believe would provide a clear picture of the spread of the virus. But there are minor advances.
— Walgreens is expanding COVID-19 drive-thru testing to 15 sites in seven states, up from just one last month. New locations are in Arizona, Florida, Illinois, Kentucky, Louisiana, Tennessee and Texas, regions experiencing escalating rates of COVID-19. Walgreens expects to be able to test 3,000 people per day, beginning later this week.
OIL PATCH: Crude prices have fallen almost 60% in the past three months and economists believe demand will be severely clipped by the virus and a global economy that was already slowing.
— Exxon Mobil slashed capital spending for 2020 by 30%, a once unthinkable retreat for one of the world’s biggest energy producers. The company said Tuesday that investments of $23 billion are anticipated in 2020, down from $33 billion.
MARKETS: Markets have roiled for weeks because so much about the virus is unknown.
— A big rally on Wall Street vanished Tuesday. The S&P 500 ended 0.2% lower, retreating from a 3.5% earlier in the day. The gains faded as the price of U.S. crude oil abruptly went from a gain to a loss of more than 9%.