Good morning, MBA readers,
Just months after negotiating contracts with the big automakers, one of the largest unions in the U.S. has been back at the bargaining table this week, precipitated this time by the coronavirus outbreak. The United Auto Workers union and Detroit’s big automakers on Tuesday night agreed to measures designed to better protect workers from the coronavirus while avoiding a stoppage in production. The union had called on General Motors and Ford — which have facilities in Missouri — and Fiat Chrysler to close their factories for the next two weeks, but ultimately the sides agreed to heightened safety measures that will avert total shutdowns.
AMC, on the other hand, made the decision to close all movie theaters nationwide for up to 12 weeks. For now, the largest theater operator in the world stands on two legs with around $600 million in cash. But that could change the longer the Leawood, Kansas-based cinema chain stays shuttered, with one analyst projecting negative $285 million of free cash flow in the first half of the year.
In another move to cut crowds at entertainment venues, Gov. Mike Parson ordered all of the state’s 13 casinos to close through March 30. It marks the first time since gambling was legalized in Missouri that a statewide closure has been ordered. The state’s top gaming official estimated that closing the casinos, which employ thousands of people across Missouri, could cost the state up to $1 million in revenue per day.
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Automakers to keep plants running amid pandemic
General Motors, Ford and Fiat Chrysler have agreed to partial factory shutdowns, more cleaning of plants and longer time between shifts. That comes in response to the United Auto Workers union calling for a shutdown of factories for two weeks o safeguard workers from the coronavirus. (Associated Press)
Missouri closes casinos to curb public gatherings
Gov. Mike Parson on Tuesday ordered all casinos in Missouri to shut down through March 30, following a similar decision in Kansas. The Missouri Gaming Commission said the state could lose up to $1 million a day in revenue from the closures. (Associated Press)
Marriott furlough could affect tens of thousands of workers
The international hotel chain has started to furlough employees as the coronavirus outbreak cripples the travel and hospitality sectors. Marriott has roughly 130,000 associates worldwide and 92 hotel properties in Missouri. A company spokesperson said Marriott will maintain employee health benefits for now. (Bloomberg)
Court mulls if DFA can be lead bidder in Dean Foods bankruptcy auction
A bankruptcy court in Houston is set to hold a hearing Thursday to decide on Dairy Farmers of America’s motion to be the initial bidder in the bankruptcy auction for Dean Foods. DFA has made a $425 million bid to acquire Dean Foods, the largest U.S. dairy producer, which filed for Chapter 11 bankruptcy in November. (Kansas City Business Journal)
AMC closes hundreds of theaters nationwide
The Leawood, Kansas-based cinema giant has closed all its movie theaters nationwide for six to 12 weeks, following a federal recommendation against gatherings of more than 10 people. AMC, which operates 634 locations in the U.S. and Canada, said it will pause billing on its A-List subscription service during the closure. (Variety)
Edward Jones shifts policies to slow spread of coronavirus
The St. Louis-based financial services firm said Tuesday that most of its 6,400 local employees will work from home, a shift from earlier guidance asking healthy employees to come in. The firm also asked its 18,000 brokers nationwide to suspend visits to clients’ homes and to restrict access to branch offices. (St. Louis Business Journal, Advisor Hub)
Regional carrier in St. Louis to shut down early as airlines reel
United Airlines regional carrier Trans States Airlines will stop flying effective April 1, as United and other airlines forecast a dramatic dip in capacity due to the coronavirus outbreak. Trans States, which employs about 900 people, previously planned to shut down by the end of the year. (St. Louis Post-Dispatch)
St. Louis soccer stadium scores reduced state incentives
The owners of St. Louis’ new Major League Soccer franchise received $5.7 million in state tax credits toward a nearly $458 million stadium in downtown St. Louis. The new agreement, passed unanimously by the Missouri Development Finance Board, comes three months after state officials rebuffed the group’s initial request for $30 million in incentives. (St. Louis Post-Dispatch)
UM System expands employee leave policy
University of Missouri System President Mun Choi announced Tuesday that employees of the statewide system may take up to 30 days of paid leave and use up to 15 days of unearned paid vacation leave to take care of their children due to school and day care closures. Choi also increased paid administrative leave from five to 30 days. (Columbia Missourian)
SSM Health plans five testing locations around St. Louis
The Creve Coeur-based hospital system plans to open three new COVID-19 testing locations around St. Charles County this week and another two next week. SSM is also offering free virtual visits for people who exhibit symptoms or may have been exposed to coronavirus. (KSDK)
Columbia Council passes emergency declaration, airport project
The Columbia City Council unanimously voted to declare a state of emergency over the spread of coronavirus, banning gatherings of 50 or more people and restricting restaurant and bar capacity. The council also authorized a $11 million project extending the main runway at Columbia Regional Airport, about $10 million of which will be paid by the Federal Aviation Administration. (Columbia Missourian)
KC startup doubles user base after unlocking its edtech platform
Boddle, which makes educational games for homework and tests, offered its services for free as schools shut down nationwide due to concerns over COVID-19. Overnight, co-founder Clarence Tan said, “hundreds of educators and parents” began signing up for the platform, doubling its user base. (Startland News)
Blues launch fund for arena employees, backed by local businessman
The St. Louis Blues have launched a fund to help employees at Enterprise Center after the National Hockey League indefinitely paused its season due to the COVID-19 pandemic. The fund is backed by a $100,000 donation from Andy Frisella, CEO of St. Louis-based fitness brand 1st Phorm, and donations from Blues players. (St. Louis Business Journal)
Say that again
“It is safe to assume we will be facing a near recession this quarter — the only real question is how long it lasts.”
That’s Chris Kuehl, economist and managing director of Lawrence, Kansas-based Armada Corporate Intelligence. He issued a report outlining how the COVID-19 pandemic will hit the economy, predicting mass layoffs in transportation, entertainment and hospitality sectors and an increased rate of unemployment, the Kansas City Business Journal reports. KC Mathews, chief investment officer at UMB Bank, recently revised his economic forecast for the year, anticipating a technical recession with a 2.4% contraction in the gross domestic product in the second quarter and a 0.4% loss in the third quarter. He added that recent efforts made by the Federal Reserve could help pad the oncoming recession.
That’s how many jobs the St. Louis metro area gained in 2019, according to a new count — just half of the preliminary estimate from December, the St. Louis Post-Dispatch reports. The drop was largely driven by inflated construction and mining job figures. The Bureau of Labor Statistics initially estimated a 12-month gain of 4,400 jobs in the sector. But that growth was nearly erased after an annual data revision, revealing the sector added just 100 jobs in 2019. The BLS also adjusted the metro’s 2018 data, down to 4,700 jobs gained from the previous estimate of 11,400, meaning metro employment only grew 0.5% last year.
As of March 17, the Missouri state lab has tested 267 people for COVID-19.
• 253 negative
• 15 positive (Counties: Greene 4, STL County 4, Boone 1, Cass 2*, Cole 1, Henry 1, Jackson 1*, and STL City 1)
*Positive tests include commercial labs reporting. pic.twitter.com/ZJ98lWjlf0
— Governor Mike Parson (@GovParsonMO) March 17, 2020
That’s the latest Missouri coronavirus tally confirmed by Gov. Mike Parson Tuesday evening. The announcement follows Cerner’s revelation to employees earlier Tuesday that one its workers tested positive for COVID-19. At least six of Kansas City’s 12-member city council are under self-quarantine after potential exposure to the virus at a conference in Washington, D.C. last week.
Hello, my name is
The St. Louis-based medical device startup, a graduate of Nasdaq’s Milestone Makers accelerator, is working toward key approval of its device from the U.S. Drug and Food Administration, the St. Louis Business Journal reports. The company’s SIP Safety Accessory is designed to provide haptic feedback to health care workers as they manually ventilate patients. SafeBVM was founded by Haris Shekhani, a University of Missouri graduate, and Prathamesh Prabhudesai. The two met during medical school at Georgia Tech, where they began work on their startup. The founders are hoping for approval from the FDA in the third quarter, after which they plan to hire more people and raise funds to scale the company.
It’s been a pleasure doing business with you this morning.