Powerscourt

By Powerscourt on 23/05/2020

Powerscourt Coronavirus Briefing – 23 May 2020

ANALYSIS

The UK government’s handling of the pandemic is attracting fresh criticism after Home Secretary Priti Patel confirmed at yesterday’s daily press conference that it is pushing ahead with a strict regime of enforced 14-day self-isolation for anyone arriving in the country. The announcement sparked an immediate backlash from the business community. Stephen Phipson, CEO of Make UK, described the measures as “isolationist” while Adam Marshall, director-general of the British Chambers of Commerce, said that the approach “will damage international business and investor confidence at a time when it is vital to demonstrate that the UK can open for business safely.”

The government faces further embarrassment today following reports that Boris Johnson’s key adviser, Dominic Cummings, has been spoken to by police about breaching lockdown rules after he was seen at the end of March in Durham – 264 miles from his London home – despite having had symptoms of COVID-19. There is, of course, precedent for this to be a resigning issue given Professor Neil Ferguson’s recent departure from SAGE after flouting physical distancing rules when he was visited by his girlfriend. There will no doubt be calls from some quarters for Cummings to take the same route.

Of perhaps equal concern for the PM will be the tension that is reported to be emerging between himself and Chancellor Rishi Sunak. Today’s FT reports that Sunak expressed his frustration on a recent conference call with other Tory MPs about the overly cautious approach that is being taken to easing the lockdown. “This country can’t be the only place in the world where people can’t go and have a drink in the pub”, he is reported to have said.

Elsewhere, there is further evidence of growing anti-Chinese sentiment following the news that the government has drawn up plans to reduce Huawei’s involvement in the UK’s 5G networks to zero by 2023. Today’s Guardian quotes Iain Duncan Smith, who has been one of the leading voices against the Chinese technology company, as saying that he hoped it would be “the start of a complete and thorough review of our dangerous dependency on China.”

Finally, a study by the medical journal The Lancet has found that hydroxychloroquine, the antimalarial drug that Donald Trump is currently taking as a pre-emptive measure against COVID-19, has been linked to increased rates of death and heart problems among COVID-19 patients. Trump has repeatedly praised the drug despite concerns raised by experts over its suitability, and recently asked “what have you got to lose?” when questioned why he was taking it.

 

WHAT ARE COMPANIES SAYING?

 

Consumer and Retail

Marston’s/Carlsberg 
The two breweries announced yesterday that they are forming a new joint venture partnership called Carlsberg Marston’s Brewing Company. Part of a cash payment being made to Martston’s as part of the arrangement will be deferred with the amount payable contingent on the extent of the share price recovery of a pre-agreed basket of companies to pre-crisis levels.

Hertz
The car rental company is seeking Chapter 11 protection in the US, with its business dramatically impacted by travel restrictions and stay at home orders. Earlier in the crisis the company made about 10,000 employees redundant and said there were doubts about the ability to continue as a going concern. The company said “The impact of Covid-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company’s revenue and future bookings”.

 

Industrials & Transport 

Toyota
The car manufacturer is to restart production at its final two plants at the beginning of next week. Toyota will be organising induction days for employees to familiarise themselves with new procedures and environment. Measures include floor markings, mandatory face masks adapted to role, and intensive disinfection. The company had already resumed operations at other plants across Europe.

BP
The oil and gas giant is halving the number of top management roles as part of CEO Bernard Looney’s new strategy, which has been accelerated as a result of the pandemic. In an email sent to staff yesterday Looney said “We expect the reinvented BP to be smaller and nimbler. We have already started by removing a layer of management at Tier 1 and 2.”

Virgin Galactic
Virgin Group has sold $366m worth of shares in its Virgin Galactic space travel business to finance its other businesses impacted by the virus. The group said it will use the proceeds to support its portfolio of global leisure, holiday and travel businesses that have been affected by the impact of the coronavirus.

John Deere
The US agricultural machinery manufacturer saw sales fall 18% in the second quarter and expects 2020 sales to fall by up to 15%. CEO John May said “We remain committed to offering a full suite of advanced digital tools that give our customers unique capabilities and help them do their work more efficiently and profitably. As a result, we’re confident the company will successfully manage the pandemic’s effects and strengthen its position serving customers in the future.”

 

Financial Services & Real Estate 

intu Properties
The shopping centre owner and manager outlined its plans for gradual reopening of its non-essential retail stores at all of its centres. The company set up a taskforce of experts to develop individual plans for each centre. Among the measures, intu staff will be given PPE and hand sanitation stands are present throughout locations. CEO Matthew Roberts said “We know we cannot do this alone and everyone who visits our centres whether for work or to shop will play their part in keeping themselves and each other safe by following the official guidelines, and the instructions and safety information provided by our teams.”

Deutsche Bank
The bank has asked hundreds of senior managers to waive one month’s salary in solidarity. The company said in a statement “As our restructuring plans progress, the management board and the group management committee have decided to lead by example and give a broader group of senior managers the opportunity to be part of this initiative.”

 

IN THE NEWS

Sunak at odds with Johnson over speed of UK lockdown exit – Financial Times

Firms must start paying quarter of staff wages – The Times

Pressure on Dominic Cummings to quit after lockdown breach – The Guardian




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