2020-03-16_Bloomberg_Businessweek_Asia_Edition

(Nandana) #1
◼COVI March 16, 2020

29

� The Olympic stadium
in Tokyo

○ With a $5.9 billion budget and a decade of plan-
ning behind it, the 2020 Summer Olympics in Tokyo
had been expected to draw 11,000 of the world’s elite
athletes and more than 600,000 tourists when it
starts in late July. But with the coronavirus spreading
rapidly, and Japan having already closed schools and
canceled public events, the International Olympic
Committee is reportedly assessing its options—
including a games with few, if any, spectators.
That prospect is becoming less unthinkable by
the day. Some U.S. college basketball, European
soccer, and Japanese baseball teams are competing
in empty venues. The annual Formula One race in
Bahrain on March 22 will be run without any fans.
Even the Olympic torch-lighting ceremony, which
usually takes place in Greece amid much fanfare,
is scheduled to occur this week without spectators.
For organizers, an Olympics behind closed doors
may be the best of a bunch of bad options. It would
satisfy the athletes and, equally important, the
media companies that pay the IOC billions to broad-
cast the events—but only if they happen.
What’s more, in-person fans are a diminishing
source of revenue. When Atlanta hosted the 1996
Summer Games, tickets accounted for 25% of the
budget. In Tokyo, they are half that. In a sign of
things to come, Japan’s bid for the 2022 World Cup
included technology to broadcast the matches

be po
Dynamics, a research service focused on the indus-
try. “They may realize that putting all their invest-
ments in one market is risky, and I’m sure they will
be thinking hard about that in the future.”
Senior Peugeot executives who take direct charge
of pressing bottlenecks have been granted full power
and resources to fix an issue. In some cases, parts
have been brought in via air instead of by road. But
air cargo is more expensive and risks driving up
costs over time. The company is also monitoring its
product mix, potentially cutting back on variants
such as diesel cars, and increasing hybrid or gaso-
line models. “We have a long list of issues, but we’ve
managed to keep production going,” Picat says. “We
could fail one day. So far so good.”
For PSA Chief Executive Officer Carlos Tavares,
avoiding a shortage in components, models, or
workers and keeping factories on course is crucial
this year. He’s in the middle of pulling off the biggest
industry deal in more than two decades, a merger
with Fiat Chrysler Automobiles NV to create the
world’s fourth-largest carmaker. With a reputation
for efficiency and delivering industry-beating profit
margins, Tavares has enjoyed PSA’s full order books
and plants running at maximum capacity.
Like many corporations, PSA has taken some
precautions to protect its workforce from the virus.
Visitors are required to fill in questionnaires asking
about recent travel to China, Italy, and other corona-
virus hot spots. And Tavares himself refrains from
too-direct contact with others. At a press briefing last
week, he kept his distance, standing on a stage to
address a room of journalists seated on chairs placed
far apart from one another.
The war room gatherings have already helped
PSA avoid some breakdowns. When a manufacturer
in Hubei stopped supplying parts for rear vehicle
sections, PSA’s engineers searched through the
car’s development phase and tracked down proto-
type machines that could stamp out the parts in
sufficient quantity—albeit at a slower pace—to fill
the gap until the Chinese partner started up again.
Turns out, the replacement machine was in Milan,
in northern Italy, the epicenter of the European
virus outbreak and now in a government-mandated
lockdown. “We managed to get the machines to
another Italian supplier, so it all worked out in
the end,” Picat says. That was before March 9,
of course, when all of Italy went into lockdown.
�Tara Patel and Chad Thomas

Do the Olympics


really need an


audience?


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