Los Angeles Times - 18.03.2020

LATIMES.COM/BUSINESS S WEDNESDAY, MARCH 18, 2020C3

half of all hotels in the coun-

try could close and about

4 million jobs in the industry

would be lost, Rogers said.

Marriott did not address

how many workers would be

furloughed, but the com-

pany confirmed that news

reports Tuesday about

“tens of thousands” of em-

ployees being furloughed

were accurate.

“While the ultimate im-

pact is difficult to predict at

this time given the fluidity of

the situation, we remain

confident in our long-term

around the world at the end

of 2019, according to securi-

ties filings.

“We are adjusting global

operations accordingly,

which has meant either re-

duction in hours or a tempo-

rary leave for many of our as-

sociates at our properties,”

the company said in a state-

ment Tuesday. “Our associ-

ates will keep their health

benefit during this difficult

period and continue to be el-

igible for company-paid free

short-term disability that

provide income protection

should they get sick.”

Marriott’s announce-

ment signals that the blow

that has already shook the

airline industry, theme

parks, ski resorts and

restaurants has started to

rattle the $660-billion U.S.

hotel and lodging industry.

Already the effect of the

outbreak is costing the hotel

industry $1.4 billion a week in

lost revenue, according an

estimate by the American

Hotel & Lodging Assn. and

the U.S. Travel Assn.

Under the worst scenar-

io, overall hotel occupancy

could drop to 35% for 2020,

prospects,” the Marriott

statement said.

In Las Vegas, 14 hotels

along the Strip temporarily

closed Tuesday, as have all

the hotels and restaurants

in Yosemite National Park.

In Southern California,

the opening of the 466-room

JW Marriott that was sched-

uled for Monday in Anaheim

was postponed indefinitely.

The Disneyland Hotel and

the Grand Californian at the

Disneyland Resort have

closed, along with the Great

Wolf Lodge in Garden Grove.

The Los Angeles City

Council is scheduled to con-

sider Tuesday an emergency

measure to require employ-

ers faced with economic

hardships to fire workers

with the lowest seniority

first and to have a docu-

mented just cause before

permanently dismissing em-

ployees.

To help hotel workers

who have already been fired,

a coalition of labor groups,

including Unite Here, Local

1 1, organized a food distribu-

tion program Tuesday at the

Hospitality Training Acade-

my.

Myra Madrid, a house-

keeper at the Four Seasons

Los Angeles at Beverly Hills,

was among about 800 hotel

workers who attended the

event to get help signing up

for unemployment benefits

or to pick up donated food.

After 10 years at the hotel,

Madrid said, she was fur-

loughed on Friday and told

she may be called back once

the crisis is over.

“I'm very worried be-

cause I have bills to pay and

my husband doesn't work

right now,” she said. “I don't

know what to do.”

Hotels seek $150 billion in aid

[Hotels,from C1]

MARRIOTTInternational, with 7,000 hotels world-

wide, plans to furlough tens of thousands of workers.

Carolyn ColeLos Angeles Times

Times on his way into the

plant. His female compan-

ion, however, said she was

hoping the plant would close

and she would get paid sick

days. “I want my free time

off!” she said.

One woman leaving the

night shift on the assembly

line identified herself as her

team’s safety representa-

tive. Asked to lay out the fac-

tory’s coronavirus safety

protocol, she said, “Stay hy-

drated, when you take a

break wash your hands,

don’t stand by any [ventila-

tion] fans, if you feel sick tell

your supervisor.”

She was asked if she

thought the plant’s workers

are safe.

“Yeah, I think they’re

safe.” Then she smiled. “For

now.”

The United Auto Workers

union has pressured Gen-

eral Motors, Ford and Fiat-

Chrysler to take more seri-

ous action to protect factory

workers. On Tuesday, those

automakers agreed to rotat-

ing plant shutdowns.

Tesla workers are not

represented by a union.

At least one parent of a

Tesla worker is concerned. A

mother who lives in the Bay

Area city of Lafayette wrote

to The Times that she is con-

cerned about her 32-year-

old son.

“It is ridiculous to say

people can stay home if they

want. The choice is to put

your health and those

around you at risk or lose

your job permanently,” she

wrote. She asked that her

name not be used because “I

do not want my son to suffer

repercussions.”

at the door of each bus, wait-

ing to get on. The buses take

workers to off-site lots and

as far away as Tracy and

Stockton.

As of late Tuesday,

though, it was unclear how

long Tesla would be able to

continue car manufacturing

in Fremont.

Businesses throughout

the Bay Area closed follow-

ing the government orders

that became effective at

midnight. Exceptions were

made for a long list of “es-

sential businesses.”

According to the Alame-

da County Public Health De-

partment, businesses al-

lowed to operate under the

three-week order “include

healthcare operations; busi-

nesses that provide food,

shelter, and social services,

and other necessities of life

for economically disadvan-

taged or otherwise needy in-

dividuals; fresh and non-

perishable food retailers (in-

cluding convenience stores);

pharmacies; child care facili-

ties; gas stations; banks;

laundry businesses and

services necessary for main-

taining the safety, sanitation

and essential operation of a

residence.”

The order from the coun-

ties that are affected also ex-

empts “gas stations and

auto-supply, auto-repair

and related facilities,” but

does not specifically exempt

automobile manufacturing.

On Monday, Alameda

County spokesman Ray

Kelly said Tesla qualified as

an “essential business.” But

he reversed that Tuesday

evening and said, “Tesla is

not an essential business as

defined in the Alameda

County health order.” He

said his earlier statement

was based on what he be-

lieved to be true at the time.

Kelly also serves as

spokesman for the Alameda

County Sheriff ’s Office,

which on Tuesday afternoon

said in a tweet that Tesla “is

not an essential business.”

It is unclear how that

might affect Tesla’s ability to

keep the factory running.

Businesses deemed nones-

sential while the coronavirus

pandemic runs its course —

most businesses in the Bay

Area covered by the order —

are still allowed to operate

“minimum basic opera-

tions.” The county order de-

fines those as “the minimum

necessary activities to main-

tain the value of of the busi-

ness’s inventory, ensure se-

curity, process payroll and

employee benefits or for re-

lated functions.”

Kelly declined to say

what that means in Tesla’s

case, and he added that Ala-

meda County officials were

talking with Tesla.

Tesla did not respond to

requests for comment. Its

share price dropped 5% in

after-hours trading.

Tesla Chief Executive

Elon Musk sent an email to

employees Monday night

saying they could stay home

if they wanted, but that the

factory would remain open.

“My frank opinion is that

the harm from the co-

ronavirus panic far exceeds

that of the virus itself,” he

wrote.

“I will personally be at

work, but that’s just me,” he

wrote, and ended the email

with, “I’d rather you were at

home and not stressed, than

at work and worried.”

Workers, none of whom

was willing to share their

name, seemed philoso-

phical.

“I need to pay the bills,

man,” one worker told The

Status of Tesla plant is unclear

AN ALAMEDA County spokesman said county offi-

cials were talking to Tesla about its Fremont plant.

David ButowFor The Times

[Tesla,from C1]

Amazon.com Inc. is pri-
oritizing the stocking of
household staples and med-
ical supplies as it struggles
to deal with a surge in online
orders from customers
avoiding stores during the
coronavirus pandemic.
The world’s biggest on-
line retailer said in a blog
post updated Tuesday
morning that it was making
the move “so we can more
quickly receive, restock, and
ship these products to cus-
tomers.”
The aim is to keep ware-
houses stocked with the
items people are buying now
— toilet paper, bleach and
sanitizing wipes — so Ama-
zon is temporarily not ac-
cepting shipments of nones-
sential goods such as flat-
screen televisions and toys.
The Seattle company
wants to be perceived as an
indispensable service, which
is hard to do when items are
out of stock and customers
have to wait days for orders
to be delivered. The com-
pany is fine-tuning its opera-
tion to quickly deliver things
people need right now, sacri-
ficing sales from its deep in-
ventory for the time being.
As online orders soar,
Amazon also is looking to
hire 100,000 people willing to
pick, pack and deliver orders

during the pandemic. Al-

ready, at least five workers at

warehouses in Spain and It-

aly have contracted the co-

ronavirus, and those num-

bers could rise in the coming

months as the disease

spreads in Europe and the

U.S.

If enough workers get

sick, Amazon could be

forced to close some of its

fulfillment centers, poten-

tially putting its vaunted de-

livery machine in peril.

In the meantime, Ama-

zon is telling third-party sell-

ers that it won’t accept ship-

ments from them in other

product categories through

at least April 5. Amazon said

it was taking a similar ap-

proach with the big brands

from which it buys directly.

“We understand this is a

change for our selling part-

ners and appreciate their

understanding as we tempo-

rarily prioritize these prod-

ucts for customers,” an Am-

azon spokesman said in an

emailed statement. Prod-

ucts already on their way to

Amazon warehouses will be

accepted, he said.

The new prioritization

applies to restocking, not

Amazon’s shipments of

items already sitting on

warehouse shelves.

The change limits prod-

ucts sold through only Ful-

fillment by Amazon, a serv-

ice through which online

merchants pay Amazon to

store, pack and ship their

products sold on the site.

Amazon’s marketplace mer-

chants can continue to sell

nonessential products, but

they have to manage pack-

ing and shipping to custom-

ers on their own.

“There are going to be

sellers who get hit hard, like

people who have no way to

ship outside of Fulfillment

by Amazon,” said Will Tjern-

lund, an e-commerce con-

sultant in Minneapolis who

helps 30 brands sell on Ama-

zon. “But it shouldn’t be the

end of the world for too many

people since there appears

to be an end in sight.”

Amazon’s priority: Essential products

Online retailer will

focus on stocking

household staples,

medical supplies.

Other items can wait.

bloomberg

AMAZON’Saim is to keep warehouses stocked with the items people are buying now — toilet paper, bleach

and sanitizing wipes — so it is temporarily declining shipments of nonessential goods, such as TVs and toys.

Gina FerazziLos Angeles Times

Stocks rallied Tuesday as
President Trump promised
he’s “going big” with plans to
prop up the staggering econ-
omy through the co-
ronavirus outbreak.
Besides the White
House’s proposal, which
could approach $1 trillion,
the Federal Reserve also an-
nounced its latest emer-
gency move to get markets
running more smoothly. The
Standard & Poor’s 500 index
climbed 6%, clawing back
nearly half of its huge loss
from the day before.
Even a 5% move used to
be extremely rare, but it’s be-
come the norm this month
as investors see a recession
as increasingly likely, if not
already here.
Many professional in-
vestors expect the market’s
big swings in both directions
to continue until health ex-
perts get the new co-
ronavirus in check.
“Government tends to
show up late to the party
with a bazooka,” said Barry
Bannister, head of institu-
tional equity strategy at
Stifel. “It’s a bit of an over-
reaction, but that’s to be
understood as normal for
policymakers.”
Trump wants the govern-
ment to send checks to
Americans in the next two
weeks to help support them
while chunks of the economy
come closer to shutting
down, Treasury Secretary
Steven T. Mnuchin said
Tuesday.
Mnuchin briefed Senate
Republicans on the
proposal, which could also
include $50 billion for the air-
line industry and $250 billion
for small businesses. The
travel industry has been
among the industries hard-
est hit by the outbreak.
Planes are sitting grounded,
and hotels and casinos are
shutting their doors.
Investors have been wait-
ing for the federal govern-
ment to offer more aid for
the economy. After flipping
between gains and losses
Tuesday morning, stocks
turned decisively higher af-
ter the Federal Reserve re-

vived a program first used in

the 2008 financial crisis to

help companies get access to

cash for very short-term

needs.

“There are still a lot of

questions in the mind of the

market as to what will be

enough,” said Robert Haw-

orth, senior investment

strategist at U.S. Bank

Wealth Management. “It’s a

start, but there’s still a lot to

be determined.”

Ultimately, investors say

they need to see the number

of infections slow before

markets can find a bottom.

Worldwide cases now near

200,000. In the San Fran-

cisco Bay Area, nearly 7 mil-

lion people were all but con-

fined to their homes in the

nation’s most sweeping lock-

down.

For most people, the co-

ronavirus causes only mild

or moderate symptoms,

such as fever and cough, and

those with mild illness re-

cover in about two weeks.

But severe illness, including

pneumonia, can occur, espe-

cially in the elderly and peo-

ple with existing health

problems, and recovery

could take six weeks in such

cases. Some people die.

Uncertainty about how

badly the virus will hurt the

economy has put the market

on a roller coaster with steep

losses giving way to sharp

gains, only to get wiped out

again, sometimes all in the

same day.

“I don’t think we’re going

to be able to trust move-

ments in the market for

some time,” said Tom Mar-

tin, senior portfolio manager

at Globalt Investments.

The Dow Jones industrial

average seesawed through

the day. It ended with a gain

of 1,048.86 points, or 5.2%, to

21,237.38. The day before, it

sank nearly 3,000 points af-

ter Trump said a recession

may be on the way.

The S&P 500, which dic-

tates the movements of

workers’ 401(k) accounts

much more than the Dow

does, is still 25.3% below the

record high it reached last

month. It’s close to where it

was at the start of 2019, be-

fore one of the best years for

stocks in decades.

Index

Dow industrials

S&P 500

Nasdaq composite

S&P 400

Russell 2000

EuroStoxx 50

Nikkei(Japan)

Hang Seng(Hong Kong)

Close

Daily

change

Daily % YTD %

21,237.38 +1,048.86 +5.20 -25.58

2,529.19 +143.06 +6.00 -21.72

7,334.78 +430.19 +6.23 -18.25

1,403.28 +69.16 +5.18 -31.98

1,106.51 +69.06 +6.66 -33.67

2,491.59 +84.75 +3.52 -26.78

17,011.53 +9.49 +0.06 -28.09

23,263.73 +200.16 +0.87 -17.47

Major stock indexes

change change

Associated Press

MARKET ROUNDUP

Stocks regain half

of Monday’s loss

associated press