Good morning, MBA readers,
For a crash course on incredibly flexible optimism, look no further than Wall Street. Following some of the worst dips in the stock market’s history in recent days, the Dow Jones Industrial Average climbed more than 20% between Monday and Thursday. The rally — triggered by a federal pandemic response that includes a $2 trillion rescue package and quantitative easing — came in spite of Thursday’s news that a record number of people filed for unemployment benefits last week.
It’s not yet clear what the immediate future will bring for markets or the economy, especially given divergent responses to the COVID-19 pandemic by major American businesses. Take the automotive sector: General Motors, which has manufacturing plants in the Kansas City and St. Louis areas, is pulling the plug on production indefinitely. Ford, meanwhile, plans to restart its facility in Kansas City in a few weeks. Other Missouri companies, operating in industries ranging from hospitality to infrastructure management, are lightening their workforce and shedding salary.
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Trump OKs federal emergency in Missouri
The White House on Thursday approved Gov. Mike Parson’s request for a federal disaster declaration in Missouri, allowing Federal Emergency Management Agency assets to be deployed in the state in response to the COVID-19 outbreak. (Kansas City Star)
GM announces layoffs, temporary pay cuts
General Motors said Thursday it would suspend production in North America indefinitely, lay off 6,500 salaried employees and temporarily slash pay by 20% for another 69,000. (CNBC)
Ford to reopen KC plant next month
The Detroit auto giant said Thursday that production will restart on April 14 at the Kansas City Assembly Plant and other factories across the U.S. The company, along with General Motors and Fiat Chrysler, agreed earlier this month to close the factories through March due to the coronavirus pandemic. (Kansas City Star)
Express Scripts sets policy preventing hoarding of potential COVID-19 drug
The St. Louis-based pharmacy benefits manager has set new limits on prescriptions of drugs currently being tested for potential to treat COVID-19 in a bid to prevent hoarding. The new rules include the malaria drug hydroxychloroquine, which has so far seen limited success against the illness. (Reuters)
Casino group asks state to ban gambling machines amid virus concerns
The Missouri Gaming Association has called on state and local health departments to crack down on thousands of unregulated digital slot machines as the state’s 13 licensed casinos face closure until at least March 30. (St. Louis Post-Dispatch)
St. Louis Pandemic relief fund doles out $370,000 in first-round grants
The COVID-19 Regional Respond Fund, a coalition of local foundations, businesses and donors, has awarded a total of $370,000 in grants to 16 local nonprofits providing services for people impacted by the pandemic (St. Louis Business Journal)
KC budget makers brace for ‘light recession’
An analysis prepared by city staffers estimates that the coronavirus outbreak could cost Kansas City $115 million in revenue over the next five years. The report sketches a “light recession” followed by a “relatively quick recovery.” (Kansas City Star)
Winstead’s owner lists biggest creditors in bankruptcy filing
Haddad Restaurant Group, which owns Kansas City steakburger restaurant Winstead’s, listed creditors who are collectively owed $5.1 million. Haddad listed $4.1 million in assets. The restaurant group filed for Chapter 11 bankruptcy protection in late February after years of dwindling restaurant revenue. (Kansas City Business Journal)
Aegion announces wage reductions, furloughs
The Chesterfield-based pipeline infrastructure company announced Thursday that it will place 15% of its North American workforce on unpaid leave. Aegion will also temporarily reduce pay by at least 15% for all workers and 50% for senior leadership. (St. Louis Post-Dispatch)
KC hotel lays off 151 amid shutdown
Crossroads Hotel in Kansas City has laid off 151 workers after temporarily closing due to the coronavirus pandemic. (Kansas City Star)
KC-area investment firm lays off 39 due to virus, oil prices
Leawood, Kansas-based Tortoise Capital Advisors has laid off 39 people, about 20% of the firm, prompted partly by the COVID-19 pandemic, as well as the dropping price of oil. The firm managed $17.6 billion in oil and gas assets as of Feb. 29. (Kansas City Business Journal)
UM System chief takes over flagship school as chancellor exits
Alexander Cartwright has resigned as chancellor of the University of Missouri to take a leadership post at the University of Central Florida effective April 13. University of Missouri System President Mun Choi will fill the role on an interim basis while maintaining his current duties. (Columbia Missourian)
Stadia Ventures announces five new investments
The St. Louis-based sports business accelerator has made five new investments of roughly $100,000 each as part of its 14-week spring cohort. (St. Louis Business Journal)
Unemployment claims in Missouri spiked last week, driven by the COVID-19 pandemic. Initial jobless claims in the state reached 40,508 for the week ending March 21. That was up from 4,016 the week before.
Say that again
“I would say the inspiration stems from trying to keep everybody working and busy. When we saw some of the bills passed and tried to create medical equipment, we just started kicking around the idea that we might be able to do something.”
That’s Largeprint.com CEO Scott Burnham, whose printing business in Kansas City began making face shields for people who have to work during the COVID-19 pandemic, The Kansas City Star reports. With a national shortage of such products, Burnham sought to use equipment the company already had to meet that demand as an alternative to laying off his employees. The company repurposed a large digital cutter — typically used to produce large banners and backdrops — to produce face shields for either medical or general public use. The company said it has sold more than 450 shields, including an order from a hospital in Texas. But other hospitals remain skeptical of the product’s use in health care settings. As of Thursday, Burnham’s company continued to offer the face shields at $12 apiece and discounted rates for large orders.
If the governor did his own shopping, we’d love to know what he would say to the cashier, the stocker, the pharmacy technicians, at his store. We’d love to know how he feels about denying them access to resources that could keep them safe.
— UFCW Local 655 (@UFCW655) March 25, 2020
That’s how United Food and Commercial Workers Local 655 responded to Gov. Mike Parson’s decision this week to not reclassify grocery store workers and pharmacy technicians as “emergency first responders.” The union, which represents more than 10,000 Missouri workers, said the classification would have given workers priority access to COVID-19 testing and protective gear. Other Missouri unions, including the St. Louis teamsters chapter, joined in expressing their disappointment.
Hello, my name is
R.F. Fisher Electric
This now-shuttered Kansas City electrical contractor is suing to claim potentially hundreds of thousands of dollars for work it did at Arrowhead Stadium, the Kansas City Business Journal reports. R.F. Fisher claims it completed about 84% of the work installing 5G capabilities at the Kansas City Chiefs’ home stadium but has received no payment for the work. The company went out of business just days before the project was due last September, when it defaulted on about $9.63 million in loans from Kansas City-based Bank Midwest.
It’s been a pleasure doing business with you this morning. Have a safe and socially distant weekend.