Good morning, MBA readers,
A week ago, the Kansas City Council passed a $1.7 billion budget, authorizing $49 million in additional spending despite the budgetary uncertainty posed by the novel coronavirus outbreak. Already, scores of businesses are closing shop, slimming down or otherwise sending thousands of workers home after Mayor Quinton Lucas issued a stay-at-home order. With recent projections suggesting the virus may not peak in Missouri until the middle of May, the prolonged, necessary disruption of commerce appears likely to drastically reduce vital tax revenue.
State officials on the other hand, are already making moves bracing for the fallout of the pandemic. They estimate that disruptions due to the virus will put a half-billion-dollar hole in Missouri’s budget. So far, Gov. Mike Parson has taken a two-pronged approach on the economic front: Make vast spending cuts for the upcoming fiscal year and ask the White House for more than $300 million in additional funding.
Layoffs continue across Missouri, with another new record being set for weekly unemployment claims. Bayer found a modest reprieve with another Roundup-related settlement. And Sprint and T-Mobile have officially — and finally— wrapped up their merger and expedited the transition into a combined, magenta-clad firm.
Want Missouri’s top business news in your inbox? Subscribe here.
Missouri sees hundreds of new coronavirus cases
The total number of confirmed COVID-19 cases jumped to at least 1,581 with a death toll of 18, state health officials announced Wednesday. One report from the University of Washington projects that the number of new cases per day in Missouri could peak by May 18. (Kansas City Star, KSDK)
St. Louis P&G worker tests positive for virus, leading to partial shutdown
An employee at Procter & Gamble’s St. Louis factory has tested positive for the coronavirus, triggering a shutdown of parts of the plant, which in the past has produced various cleaning products. (St. Louis Business Journal)
While Parson continues to reject statewide shutdown, more counties enact their own
Gov. Mike Parson said Wednesday he is still not ready to issue a statewide stay-at-home order to stem the spread of COVID-19. Some small, rural counties where cases are few have joined the state’s larger cities in issuing orders to stay home. (Kansas City Star)
Lucas: KC businesses must be ‘mom and pop’ to qualify for emergency loans
Kansas City Mayor Quinton Lucas on Wednesday said local businesses seeking loans from the city and civic groups must be “mom and pop” organizations with 20 or fewer employees and less than $750,000 in annual revenue. The city is offering loans to qualifying businesses up to $25,000. (Kansas City Star)
Virus stokes ‘network strain’ in KC, St. Louis
A spike in internet use during the ongoing pandemic has cut internet speeds in Kansas City by 26%, Springfield by 23% and St. Louis by 19%. Service in some places has dipped below the 25 megabits-per-second download speed ideal for telecommuting. (St. Louis Post-Dispatch)
Missouri River likely to enter minor flood stage this week
The Missouri Levee and Drainage District Association projects the Missouri River will rise into minor flood stage from Nebraska City to northwest Missouri this week. The group’s chairman said the area is not prepared for higher-than-normal runoff due to soil moisture and spring rains. (Missourinet)
Legere steps out as T-Mobile, Sprint complete merger
T-Mobile President and COO Mike Sievert will lead the combined firm, succeeding CEO John Legere ahead of the initially scheduled transition of May 1. Sievert pledged Wednesday that T-Mobile will implement 5G service on Sprint’s network “almost immediately.” Celebrations planned at Sprint’s headquarters were moved online. (CNBC, Kansas City Business Journal)
Neslé Purina acquires natural pet food brand
The St. Louis-based pet care company has acquired Lily’s Kitchen, a U.K.-based producer of natural foods for dogs and cats. Lily’s Kitchen has around $105 million in sales across 6,000 stores worldwide. (St. Louis Business Journal)
Construction giant looks to make strategic hires amid pandemic scramble
Clayco Chairman and CEO Bob Clark will forgo his salary while the Chicago-based construction firm, which has operations in St. Louis, looks to fill certain roles critical to continued work on projects. Clark emphasized that the industry will need a “massive infrastructure investment” to rebound within the next 18 months. (St. Louis Business Journal)
Bayer settles KC lawsuit for nearly $40 million
The agriculture giant has agreed to pay $39.5 million to settle a class-action lawsuit filed in Kansas City. The suit claimed Monsanto ran misleading ads about its Roundup weedkiller and its potential health risks. As part of the deal, Bayer will remove language from Roundup marketing that says glyphosate, the product’s active ingredient, only affects plants. (Bloomberg)
KC-area company acquires Michigan competitor
CertTech, a Lenexa, Kansas-based company that works with companies in highly regulated industries test new technology, has acquired Michigan-based WTI. With the deal, CertTech hopes to better serve big clients across industries ranging from rail to aerospace. (Kansas City Business Journal)
UMSL moves all summer courses online
The University of Missouri-St. Louis plans to invest in additional technologies to support lab, clinical and field experiences as all summer classes are moved online and online course fees are waived in response to the prolonged proliferation of COVID-19. (Columbia Missourian)
Layoffs, furloughs hit News-Leader
The Springfield News-Leader has laid off 41 employees due to the closure of its local printing press and put about half of its 17-person news staff on partial furlough. The printing press closure was planned before the coronavirus pandemic hit. The paper’s parent company, Gannett, plans furloughs at more than 100 newspapers across the U.S. over the next three months. (Springfield Business Journal)
Say that again
“We always say, don’t let perfect be the enemy of good in the middle of a crisis.”
That’s Dave Peacock, president and COO of Schnucks, explaining the St. Louis-based grocery chain’s general approach responding to the COVID-19 pandemic, the St. Louis Business Journal reports. It was inspired in part by a webinar that around 200 Schnucks managers attended last week about crisis leadership. Hosted by retired Army Gen. Stanley McChrystal, the talk emphasized qualities like visibility, honesty and empathy. Peacock said Schnucks has tried to empower managers to make adjustments to the company’s standardized response plan to better accommodate customers at the store level. The former Anheuser-Busch president has also instituted daily video calls with nearly 200 store managers.
That’s the number of people in in Missouri who filed for unemployment insurance last week, according to figures released Thursday by the U.S. Department of Labor that are not seasonally adjusted. That more than doubles the state’s previous record number of filings as joblessness continues to surge as a result of the COVID-19 pandemic. Missouri mirrored the national trend. Across the U.S., some 6.6 million people filed for unemployment last week, doubling the record 3.3 million claims filed one week earlier.
When we began this fiscal year, we anticipated economic growth, and we had based our budget on that growth. COVID-19 has had serious impacts on our anticipated economic growth, and now we are expecting significant revenue declines.
— Governor Mike Parson (@GovParsonMO) April 1, 2020
That’s Gov. Mike Parson explaining on Twitter why he announced $180 million in state budget restrictions Wednesday to fill an anticipated shortfall of over $500 million due to the COVID-19 pandemic. Missouri’s public universities would take the largest brunt of the new funding cuts — more than $61 million. Parson also calls for cutting $54 million in facilities maintenance reserves, $12 million from water resource infrastructures, $11.6 million from community colleges and almost $6.5 million from the Missouri Division of Tourism. A statement from Parson’s office said the state will seek another $315 million in federal funding to fill the rest of the gap.
Hello, my name is
This medical device startup from the Kansas City area has raised $8.8 million in a recent funding round, bringing total funding raised to date to $20 million, the Kansas City Business Journal reports. Co-founded by serial entrepreneur Nick Franano, Artio Medical makes products to treat neurovascular, peripheral vascular and structural heart diseases. The Fairway, Kansas-based firm plans to use its latest funding to secure federal clearance to sell its Solus Gold device, used in a minimally invasive procedure to help regulate blood flow. Formerly known as Metactive Medical, Artio rebranded in February.
Word to the wise
This is the new term being used to describe hackers forcibly entering meetings and lectures conducted on videoconferencing platforms like Zoom. These intruders often shout profanity or show graphic images, according to the Columbia Missourian. As stay-at-home becomes the new national norm, reports of this phenomenon are becoming more frequent as school lectures and company meetings are moved to the virtual space. By Wednesday, the University of Missouri reported that three separate Zoom meetings were disrupted by uninvited individuals who used “discriminatory and reprehensible” language. The school suggests students, faculty and staff to host Zoom meetings by using waiting rooms to prevent external users from jumping in. Zoom itself has seen a sharp rise in use over the past few weeks with nearly 600,000 downloads, The New York Times reports. Nationally, Zoom events hosted by companies like Chipotle were zoombombed by unwanted disruptors.
It’s been a pleasure doing business with you this morning.