B2| Saturday/Sunday, March 28 - 29, 2020 **** THE WALL STREET JOURNAL.
THE SCORE
THE BUSINESS WEEK IN 7 STOCKS
ALASKA AIR GROUP INC.
Uncle Sam wants to get into the airline business.
Treasury Secretary Steven Mnuchin indicated that the
U.S. government would take stakes in beleaguered
carriers in exchange for billions in direct grants, The
Wall Street Journal reported Thursday. The economic rescue
package passed this week includes $25 billion in direct fund-
ing for passenger air carriers on top of loans and loan guaran-
tees. Alaska Air Group sharesgained 8.9% Thursday.
ALK
8.9%PERFORMANCE OFAIRLINE STOCKS THIS PAST WEEK
Source: FactSet700102030405060%Alaska AirUnited
AirlinesAmerican
AirlinesMon. Tues. Wed. Thurs. Fri.A Crash Course
In Crisis Management
From his home office, new HP CEO Enrique Lores is trying to reinvent
the hardware maker; a push into 3-D medical printersON BUSINESS|JOHN D. STOLL
MICHAEL BUCHER/THE WALL STREET JOURNALevery blue chip in America—has
tanked; and credit availability is
fragile. “Right now, cash is king,”
he said Wednesday.
Rather than fast-track new
guidance to appease Wall Street,
Mr. Lores is preaching prudence.
“We need to say the right thing at
the right time.” Spending all his
time with finance executives and
the treasury staff to address one
issue would limit his effectiveness.
Because casual encounters can’t
happen in virtual workplaces, Mr.
Lores has bumped up his meetings
with senior executives from one a
week to three, and is calling on
three or four major customers a
day. He has changed the digital
background on the Zoom app to
the Palo Alto, Calif., garage where
Bill Hewlett and Dave Packard
started the company.
There are people who Mr. Lores
regularly checks in with: Two of
his sons have returned from New
York to California during the self-
isolation era; his predecessor at
HP, Dion Weisler; HP’s Chairman
Chip Bergh (who is CEO of Levi
Strauss & Co.). And he regularly
talks to his sister and brother in
Spain, where both are doctors.
He also meets regularly with a
group of CEOs in similar indus-
tries. An avid runner, Mr. Lores
tries to squeeze in running or cy-
cling time. When not on confer-
ence calls or reviewing company
estimates, forecasts and plans, he
pores over emails from employees.
Workers share stories and ex-
press eagerness to pitch in anying over for his predecessor, Mr.
Lores started shaking things up.
He announced up to 9,000 job cuts
and said services and new technol-
ogies, such as HP’s nascent 3D-
printing unit, needed to be a
higher priority going forward.
Crafting this new strategy and
battling Xerox’s takeover attempt
consumed a substantial amount of
time at the start of the year when
HP’s management began hearing
about coronavirus. Mr. Lores
tapped heads of four different HP
units to monitor the situation and
build a continuity plan while therest of the company focused on
growth, cost cutting and strategy.
“The world has radically
changed in these last two or three
weeks,” Mr. Lores said.
HP’s capital strategy shows how
quickly things can change. In late
February, Mr. Lores announced a
$15 billion share-buyback plan de-
signed to stave off Xerox. That in-
cluded $8 billion in repurchases
committed within a year. That
seems like a pipe dream today.
A month later, Mr. Lores is
spending time evaluating the scale
of that plan. The economy has
nosedived; HP’s stock—like almostway they can. “The problem is not
to find people who want to partici-
pate, it’s trying to choose the peo-
plewewanttodoit.”Hewants
the workforce to pace itself. “We
need to realize this is not going to
be a very short-term thing.”
On Wednesday, Mr. Lores hosted
a video Q&A with 1,200 company
leaders. His message to them is
that while HP is weathering the
same storm every other company
is, it has unique opportunities. The
trick is to find them, analyze them,
and seize them.
Many of the startups disrupting
older, established companies did
exactly that during the financial
crisis. Companies such as Airbnb
Inc. and Spotify Technology SA
were created during or immedi-
ately after the last major down-
turn. Netflix Inc., Amazon.com Inc.
and other tech companies, mean-
while, experienced exponential
growth then, following years of
tinkering with unprofitable busi-
ness models.
Mr. Lores has told his employ-
ees to use this current crisis to re-
invent HP.
The most immediate initiative
that shows they are listening di-
rectly relates to combating the pan-
demic. HP has ramped up its print-
ing of mask adjusters, face shields,
and hands-free door openers on 3-D
medical printers, and has already
supplied more than 5,000 of these
products to hospitals.
“It’s not only about protecting
ourselves,” he said. “It’s about
finding opportunity.”Enrique Lores, pictured here during a video call, is running HP from his home during the coronavirus outbreak.‘The world has
radically changed in
these last two or
three weeks.’WALT DISNEY CO.
More housebound consumers
are streaming videos, but ad-
vertisers aren’t following. The
streaming uptick experienced
by Walt Disney’s Hulu, AT&T
Inc.’s HBO and Amazon.com
Inc. has created more available ad time,
but advertiser demand is falling as
much of U.S. economic activity stalls
due to the coronavirus pandemic. SpotX
Inc., which helps publishers sell video
ads, said travel, hospitality and real-es-
tate marketers cut ad spending through
its platform by more than 70 %from
March 16 to March 22, compared with
the previous seven days. Disney shares
rose 4.6% Thursday.
DIS
4.6%the U.S. government take an eq-
uity stake or warrants for shares
in loan recipients. The govern-
ment could instead take a senior
debt position in recipients.
“Right now, Boeing is saying
they don’t need it,” U.S. Treasury
Secretary Steven Mnuchin said
Friday on Fox Business Network.
He added: “I appreciate the fact
that Boeing thinks they can oper-
ate on their own—that’s what we
want them to do.”
Earlier in the week, Mr. Cal-
houn told the television network
Boeing would rather secure pri-
vate financing than give the gov-
ernment an equity stake. “If they
forced it, we’d just look at all the
other options, and we have got
plenty,” he said.
Mr. Calhoun said that Boeing
had $15 billion in cash, and it still
has access to a $9.6 billion loan
facility. A Boeing spokesman said
Friday the company was consid-
ering all options for government
aid, including a share of $454 bil-
lion of stimulus funds available to
businesses across industries that
don’t require the government tak-
ing an equity stake.
U.S. Rep. Rick Larsen (D.,
Wash.), whose district includes
Boeing’s Seattle-area operations,
said the plane maker had lobbied
against the equity-stake require-
ment, but lawmakers wanted to
protect taxpayers.
“If Boeing does take advantage
of the program, it does help the
workers and supplier network
quite a bit,” said Mr. Larsen, who
heads a key House aviation panel.
Whatever help Boeing might
wind up seeking, President
Trump has vowed to protect the
Chicago-based manufacturer. It is
widely regarded as too important
to the nation’s economy and na-
tional defense for the government
to allow it to fail. Boeing is the
nation’s largest exporter and sec-
ond-largest defense contractor. It
supports thousands of smaller
businesses that supply everything
from aircraft fuselages and wings
to cockpit electronics.
The company has declined to
detail the components of the $
billion it has been seeking. After
the Senate passed its stimulus bill
late Wednesday, Boeing praised
the package, saying its liquidity
boost was “critical for airlines,
airports, suppliers, and manufac-
turers to bridge to recovery.”
Faced with mounting financial
strain, Boeing has suspended its
dividend and has been consider-
ing layoffs. Executives have said
they were working to avoid cut-
ting or furloughing employees
from the 65,000-worker commer-
cial arm.
Under the proposed stimulus
plan, certain loan recipients must
maintain at least 90% of their
current workforce through Sept.
30, among other worker protec-
tions, eliciting praise from
the International Association of
Machinists and Aerospace Work-
ers, which represents Boeing fac-
tory workers in the Seattle area.
—Lindsay Wise and Siobhan
Hughes contributed to this
article.Continued from page BMGM RESORTS
INTERNATIONAL
MGM Resorts is rolling the
dice on a new boss as it rides
out the coronavirus pandemic.
Bill Hornbuckle, the company’s
president and chief operating
officer, is taking over as act-
ing CEO after outgoing Chief Executive
Jim Murren stepped down from his post
on March 22. MGM Resorts also said
board member Paul Salem will succeed
Mr. Murren as chairman. MGM Resorts
and other casino operators have closed
down temporarily and implemented
widespread layoffs and furloughs in re-
sponse to the spreading coronavirus.
Sharesgained 0.4% Monday.
MGM
0.4%OCCIDENTAL PETROLEUM
CORP.
Occidental Petroleum is cut-
ting salaries for its U.S. em-
ployees by up to 30 %, one of
many American companies
looking to slash expenses as
the new coronavirus spreads
across the country. The Houston com-
pany is facing plunging oil prices, high
debt from an ill-timed acquisition and
falling demand due to a halt in economic
activity. Chief Executive Vicki Hollub’s sal-
ary will be cut by 8 1 % and the oil-and-
chemical company’s top executives’ pay
will be cut by an average of 6 8%, The
Wall Street Journal reported Wednesday.
Occidental sharesrose 12% Wednesday.
OXY
12%FORD MOTOR CO.
Ford and its rival General
Motors Co. agreed to help
produce equipment for those
suffering from the disease
caused by the new coronavi-
rus. Ford and 3 M Co. employ-
ees are working to boost manufacturing
of 3 M’s respirators, the companies said
Tuesday, and are also working to de-
velop a new respirator that could be
produced in a Ford plant. GM said Fri-
day it would work with a partner to
make ventilators at one of its plants.
President Trump criticized GM in a se-
ries of tweets Friday for not producing
ventilators quickly enough. Ford shares
gained 23% Tuesday.
F
23%CVS HEALTH CORP.
Pharmaceuticals are still in
plentiful supply but cleaning
supplies and paper products
are scarcer. That was the
message Tuesday from the
CEO of CVS Health, who
spoke virtually at The Wall Street Jour-
nal’s Health Forum. He said the phar-
macy giant has not experienced any dif-
ficulty securing important medications
for people with chronic disease, but its
retail operations for household basics are
under strain as demand intensifies. The
company is seeking to fill 5 0 , 000 posi-
tions and offering its workforce bonuses
and child care to keep them on the job.
CVS sharesadded 2.4% Tuesday.
CVS
2.4%COMCAST CORP.
NBCUniversal Chief Executive
Jeff Shell has tested positive
for Covid- 1 9 and is recover-
ing at home, the most senior
media executive known to
have been affected by the
new coronavirus. The company’s NBC
News network has also lost a longtime
staffer; audio technician Larry Edge-
worth died from complications related
to coronavirus, the network said March
20. Mr. Shell, who succeeded Steve
Burke as CEO of the Comcast Corp. unit
earlier this year, said in a Thursday staff
memo that he is improving every day.
Comcast sharesgained 9.4% Thursday.
—Francesca Fontana
CMCSA
9.4%Lobbying
Pays Off for
Boeing
Every chief execu-
tive in America sits
on a hot seat right
now.
For Enrique Lores,
the seat has been on
fire since he tookHP
Inc.’s top job in November. An
electrical engineer who joined the
company as an intern in 1989, the
54-year-old Spaniard was barely in
charge when turmoil started.
Four days after his start date,
news broke that Xerox Holdings
Corp. was cobbling together an of-
fer to buy the 81-year-old com-
puter-hardware maker. In the
months that followed, Mr. Lores
swatted away hostile salvos from
Xerox. In a letter sent to share-
holders Wednesday, he wrote that
pursuing a megadeal during a pan-
demic isn’t prudent.
“The key thing I need to do
right now is prioritize my time,”
Mr. Lores told me Thursday morn-
ing during a Zoom chat. HP manu-
factures and sells gadgets in mar-
kets all over the world, many of
which have been rattled by the
coronavirus outbreak. If Mr. Lores
doesn’t keep production lines mov-
ing, management teams talking,
and customers buying during a cri-
sis, there will be no HP left for Xe-
rox or anyone else to pursue.
“Right now is when we show the
value and culture of HP,” he said.
The hardware giant is known for
its printers, desktop computers and
laptops; Mr. Lores thinks now is
the time to write a “new chapter.”
Two things he wants the company
to be more associated with are 3-D
printers and any product that helps
America work from home.
Like many CEOs I’ve talked to
this month, Mr. Lores is spending
way more time in his Northern
California home office than ever
before, using the tiny portal on a
smartphone or webcam to talk
with people he used to grab in
hallways or informally congregate
with in a conference room. He reg-
ularly checks in on operations in
hard-hit nations, including Italy
and China, and is monitoring li-
quidity like a hawk.
The tone of conversations is
changing. “I think what we’re see-
ing broadly is people opening
themselves up.” He’s sat through a
lot of stories recently, including
during his calls with those who
keep HP’s coffers full. “We not only
talk about the business, but we use
the time to engage with our cus-
tomers on a different level.”
Mr. Lores is the latest in a line
of people whose jobs I’ve profiled
during these unprecedented times
for the Journal’s special “Making
It Work” series.
I’ve learned how a funeral home
director advises mourners how to
say goodbye in an era of social dis-
tancing. How a mail carrier spends
as much time washing his hands
as delivering mail. How a nurse
figured out a sanitary way to reuse
a disposable gown.
The CEO’s role in making it
work? Point people to the light at
the end of the tunnel.
Mr. Lores took the HP job with
an eye on transforming a culture
in need of a refresh. He began his
31-year HP career on a team devel-
oping a graphics printer called the
DraftMaster. He went on to run
various company units, including
imaging and printing. He was in-
strumental in the split of the
Hewlett-Packard Co. in 2015, which
separated the personal computing
division from the division selling
corporate services and hardware.
Four weeks before officially tak-