THE MONTH CORONAVIRUS FELLED AMERICAN BUSINESS
March began amid an 11-year expansion and ended with blue-chip companies begging for bailouts. Swift and sharp, the pandemic cut through the country’s commerce like nothing before it.
Mike Wirth was upbeat when he told a roomful of investors in New York’s St. Regis Hotel on March 3 he would bump elbows instead of shake hands at Chevron Corp.’s annual analyst meeting. It was two days after New York reported its first confirmed case of Covid-19.
Chevron handed out hand sanitizer as swag instead of the travel power adapters and souvenir pieces of shale rock it had in the past. The chief executive assured the room his company had enough cash to ride out any serious downturn.
Eight days later, on March 11, David MacLennan was at home when a text from his sister flashed the name “Rudy Gobert.” It took the Cargill Inc. CEO a moment to place him as a basketball player who had just tested positive for coronavirus. The National Basketball Association was suspending its season.
Mr. MacLennan briefly wondered what ESPN would talk about without sports. Then his mind turned to the empty stadiums that serve burgers made from the agriculture giant’s beef, on buns baked with the wheat that Cargill trades. “What’s next?” he asked his senior executives in a private group chat.
By March 27, a new reality was gripping the nation. Macy’s Inc. boss Jeff Gennette had kept all 125,000 employees on the payroll since the company had closed its stores but couldn’t do it any longer.
Nobody was shopping, and it was unclear if they would come back when stores reopened. Mr. Gennette had already suspended Macy’s dividend and borrowed $1.5 billion from its banks. Now he decided to furlough most of his workers. “What if every store is closed through May?” Mr. Gennette worried.
It was a month unlike anything American business has experienced. The U.S. entered March still riding an 11-year economic expansion. Unemployment was at 3.5%, a 50-year low. The Dow Jones Industrial Average had recently been flirting with 30000. The biggest worry for many companies was finding workers to fill open positions.
By the end of the month, 10 million had lost their jobs. The Dow was at 21917. Airlines were on the verge of bankruptcy. Other icons of American commerce were shutting down, seeking government aid, shedding staff and wondering whether their businesses even made sense anymore. Countless small enterprises failed.
As of Friday, about 7,000 Americans were dead of Covid-19, the respiratory disease caused by the virus, with the toll expected to increase exponentially in coming weeks.
The speed of the spread and the depth of the impact caught corporate leaders off guard. Macy’s stores and McDonald’s dining rooms were locked. Malls and movie theaters went dark. Disney World closed, as did Detroit’s auto factories. Professional sports were suspended. The Olympics were postponed.
Before the month was out, Marriott International Inc. stopped paying tens of thousands of people. General Electric Co. cut staff. Ford Motor Co. suspended its dividend. Amazon.com Inc. and Walmart Inc. struggled to keep stocked and staffed. Goldman Sachs Group Inc. borrowed from the Federal Reserve’s rainy day fund.
“Just never seen anything, remotely, like how fast it turned,” said Scott Kirby, the president and soon-to-be CEO of United Airlines.
Some routines may not return, which means some giants won’t survive. People stopped dining out or going to the movies. Will they return? Corporate workers left their headquarters, and families abandoned cities. When will people feel it’s safe again to fly or go out for a beer?
America’s 500 biggest public companies were worth $3 trillion less at the end of the month than they were at the beginning.
During the month the heads of America’s biggest companies felt constantly in the dark. Many sought out hospital CEOs, government officials or health experts to find out what they knew.
Pfizer Inc.’s CEO Albert Bourla choked up when he pushed his scientists to have a vaccine by the fall. Hedge-fund billionaire Bill Ackman raced to get cash from the bank. Michael Corbat bought extra routers to run his global bank, Citigroup Inc., from home.
The first U.S. death came on the last day of February. A man in his 50s died in Washington state, where a nursing home had become the virus’s first U.S. hot zone. A few days earlier, officials had warned of a wider outbreak and limited flights to and from China and Italy.
The White House projected confidence in the U.S. response. “The risk is low,” said Robert Redfield, director of the Centers for Disease Control and Prevention. “We need to get on with our normal lives.”
*MARCH 1 *
Starbucks Corp. told its U.S. baristas to start regularly sanitizing door handles, chairs, tables and coffee bars.
The coffee giant had seen the effects of the virus first hand in China, where the outbreak had forced it to close about half of its 4,300 cafes in mid-January.
Rough numbers drawn up by CEO Kevin Johnson and his finance chief were grim.
While driving over one of Seattle’s skybridges to work on Jan. 21, Mr. Johnson heard the morning news report of the first confirmed case of the novel coronavirus in the U.S.—in Starbucks’ home state of Washington. “Here we go,” he said to himself.
Like Starbucks, IMAX Corp. has significant operations in China and had spent the past month watching the virus escalate to the point of closing theaters, including 702 of its signature big screens.
With the virus spreading in the U.S., CEO Richard Gelfond tapped acquaintances to connect with experts, including a former CDC official. He called Samuel Stanley, the president of Michigan State University and a biomedical researcher whom Mr. Gelfond knew from his work with Stony Brook University, his alma mater.
The conversations left him convinced that the number of cases in the U.S. was likely to skyrocket, especially as he learned how little testing had been done. The pressure on theaters to close would rise and IMAX would have a sequel to China on its hands, this time in the world’s No. 1 box-office market.
His company had $100 million in cash, but that wouldn’t last long if the lights went out in its theaters. He borrowed the company’s entire $300 million credit line and started scrimping where he could. “Cancel anything you can get your money back on,” Mr. Gelfond told his team.
Chevron’s jet ferried Mr. Wirth to New York, where he and his wife took their daughter’s college roommate to dinner at Gramercy Tavern. It was still full.
Citigroup opened a backup office in Rutherford, N.J., across a swamp from the New York Giants’ football stadium. The goal was to spread out staff and have a backup in case of an outbreak on the main trading floor in Manhattan. It started moving traders slowly, in case it overloaded the system.
How many are sick? How many dead? An operations technocrat, Citigroup boss Mr. Corbat focused on the stats. He ran a global bank with operations in 160 countries, including places where the virus had already been spreading fast.
“You can’t go where it is. You’ll already be two weeks behind,” Mr. Corbat told his lieutenants in a meeting. “Project where it’s going.”
David Calhoun and his peers at Boeing Co. held the first of what became routine internal calls about preparing for the coronavirus crisis. The CEO said the company should expect a sharp decline in air-travel demand. Boeing’s medical staff had flagged reports about the new virus in China in early January.
Discussions touched on potential layoffs. Mr. Calhoun said Boeing needed to be careful, telling colleagues, “We cannot recover from this if we don’t have the people we need to build these airplanes.”
FedEx Corp. executives gathered to review the fiscal quarter that had ended over the weekend. They had 14 days to decide what to tell Wall Street.
The Federal Reserve had surprised markets that day with an emergency half-point rate cut—the central bank’s first rate change in between scheduled policy meetings since the 2008 financial crisis.
FedEx had already seen the virus tear across China, where it had 900 employees on lockdown in the city of Wuhan, and seen the early signs of the carnage in Italy. The company was disinfecting cockpits and providing protective equipment to mechanics.
Data coming into the company’s computer systems from around the globe were confounding. “The lights are flashing red,” said CEO Fred Smith, “We can’t forecast this.”
Mindy Grossman flew to Denver to attend the final leg of Oprah Winfrey’s sold-out “2020 Vision” tour, a concert-like pep rally hosted by her company, WW International Inc., better known as Weight Watchers.
At a board meeting in Denver a few days before the event, concerns about the coronavirus were growing. Ms. Grossman, Ms. Winfrey and the rest of the WW board discussed having more hand sanitizer at the venue and steps they could take to protect the roughly 12,000 people who would attend.
United Airlines said it would cut flying by 20% internationally and 10% in the U.S. Over the next few days the airline lined up $2 billion in new debt and slashed spending by $2.5 billion.
Mr. Kirby had been in China in January, and had shaken hands and taken selfies with employees at another event. He had gotten sick, a rarity, and wondered at one point if he had contracted Covid-19.
In February, a surge of infections in northern Italy had left Milan under quarantine and convinced Mr. Kirby that the virus would tear through the rest of the world.
“It’s too late to put the genie in the bottle and stop it,” he told his team in late February. “We’re going to have dramatically fewer people flying if that’s true.” He realized United needed to cut costs and raise capital, and that the industry couldn’t avoid mass furloughs without government aid.
Dara Khosrowshahi took the stage at a Morgan Stanley conference in San Francisco and struck a different tone. The Uber Technologies Inc. chief had made a tall promise in February, vowing that the money-losing company would turn a profit by the end of 2020.
Coronavirus won’t change that, he told the crowd. After all, the hardest hit countries at the time—China, South Korea and Iran—made for less than 1% of Uber’s rides bookings.
MARCH 7 Chevron’s Mr. Wirth watched with worry one of the first shots fired in an oil price war between Saudi Arabia and Russia. The monthly crude oil prices being offered by Saudi Arabia were $6 to $8 per barrel below U.S. prices.
The message was clear: Saudi Arabia was opening a spigot of cheap oil in a bid for market share. Mr. Wirth’s industry faced a dual disaster of falling demand and increasing supply.
“We’re in an entirely different world,” he thought as he boarded Chevron’s jet the next day for a flight back to his San Ramon, Calif., headquarters.
Randall Stephenson, the chief of AT&T Inc., was talking with a half-dozen fellow CEOs at a conference hotel in Georgia. What are we dealing with right now? What are we facing? Robert Bradway, the CEO of drugmaker Amgen Inc., told them about a phone call he’d gotten from a contact in China. He walked the group through the numbers.
“Holy cow,” Mr. Stephenson said. That night he told his finance chief to activate the “black swan” plan that AT&T breaks out when wildfires or earthquakes disrupt its business. It hadn’t modeled for a pandemic.
Oil prices fell 24%, their worst day since the Gulf War in 1991. Mr. Wirth convened his closest advisers with a message: “We’re going to have to make some fundamental changes.”
The Chevron team analyzed how bad things could get. What if oil storage fills up? What if the market is oversupplied by 20 million barrels a day? How would Chevron move equipment and personnel if travel restrictions tightened? How could the company protect workers on weekslong shifts in remote locations?
Mark Zuckerberg called the director general of the World Health Organization about building a bot to push reliable information about the new illness and help curb rumors.
The Facebook Inc. founder had spent the weekend in Palo Alto, Calif., working with about 20 managers to design a coronavirus hub for his social network. It would pull information from respected news outlets and authorities like the WHO and CDC and appear at the top of users’ news feeds.
Starting in January, Mr. Zuckerberg and his wife, Priscilla Chan, a pediatrician, started fielding increasingly alarming emails from scientists involved in their family foundation. In late February, former CDC chief Tom Frieden sent a note to the couple saying the new virus could no longer be contained.
Bill Hornbuckle was in MGM Resorts International’s corporate offices in the Bellagio resort on the Las Vegas Strip, when the interim CEO got an unscheduled visit. A staffer who handles crisis management told him a New York woman who had stayed the previous weekend at the company’s Mirage casino tested positive for coronavirus.
The guest had been a speaker at a “Women of Power Summit.” Among the people she’d been in contact with were MGM employees who attended the conference.
Las Vegas was still in business. The prior Saturday night, 5,000 people went to a Bruno Mars concert at an MGM venue and 15,000 watched an Ultimate Fighting Championship event at the company’s T-Mobile Arena. “I was somewhat shocked by the level of activity,” Mr. Hornbuckle said. “You wouldn’t have known anything was going on at that end of the Strip.”
Later that day, more bad news arrived. A man who worked at a horse track in Yonkers, N.Y., where MGM operates the Empire City Casino, had died after being diagnosed with Covid-19.
“We’re going to have to close,” Mr. Hornbuckle went home thinking. If that happened, 60,000 people would be out of work.
Shoppers in a Tacoma, Wash., mall heard an announcement at 6 p.m. over the public address system. The Macy’s store was closing early. Managers and store associates escorted unwitting customers out of the building.
A Macy’s employee had tested positive for coronavirus. The employee had not been at work for seven days. The store was deep cleaned and disinfected overnight.
It reopened at 11 a.m. the next day, an hour later than normal.
Macy’s repeated this process at roughly a dozen of its more than 800 stores around the country over the next week. The retailer fielded calls from state and local officials either suggesting or mandating its stores close.
Macy’s principal concern at a board meeting in late February had been the disruption to its supply chain in China. “The impact of the virus on our business could be 10 times what we had initially expected,” thought Mr. Gennette, the CEO.
The CEOs of seven banks gathered at the White House guard station a little after 2 p.m. Mr. Trump wanted to discuss their ability to keep lending. Charlie Scharf had been in charge at Wells Fargo & Co. just six months and had spent most of it trying to clean up a fake-accounts scandal that had dogged the bank for three years.
Mr. Scharf is a trustee at Johns Hopkins University, his alma mater, and the week before had spoken with the head of its medical school, Dr. Paul Rothman. Even as U.S. government officials were playing down the risk of a pandemic, Johns Hopkins’s models were bleak.
“This is going to be serious,” Mr. Scharf told top lieutenants the week before, ordering them to start preparing Wells Fargo, with its 260,000 employees and $2 trillion of assets.
At the White House, the door to the Roosevelt Room swung open and CEOs of the country’s biggest hospital systems filed out. Dr. Rothman and Mr. Scharf exchanged nods.
Hospital executives had urged the administration to prioritize their patients for coronavirus testing. Doctors and nurses were burning through dwindling stock of protective masks and gowns, the executives said. Faster test results would rule out some patients and preserve critical gear.
Sam Hazen, the CEO of HCA Healthcare Inc., warned hospitals would be hard-hit financially, too. Revenue from elective patients would fall at hospitals just as they increased spending to prepare for critically ill coronavirus patients.
In Chicago, executives of CME Group Inc. met in a conference room overlooking the city’s river. The agenda: What should they do about the futures exchange’s trading floor? Even though markets were now mostly digital, hundreds of traders were still gathering a few blocks away in CME’s pits, haggling over commodities like wheat and cattle.
The symbol of a bygone age of American capitalism was also a potential cesspool. The World Health Organization had earlier that day declared the spread of the virus a pandemic.
Close it down, CEO Terrence Duffy said. Mr. Duffy, a former hog-futures trader, had been following news of the virus closely, and not just because of his job: In 2017, he had suffered a collapsed lung, and he was at high risk from Covid-19.
CME said the floor would shut down after two more days of trading, becoming the first major U.S. exchange to take such a step. Mr. Duffy told floor traders complaining about lost profits, “We can do all the deep-cleaning we want, but if someone brings the virus in five minutes later, it’s irrelevant.”
That evening, he flipped on the television to watch Mr. Trump’s televised address from the Oval Office. The president said he was banning travel from most of Europe. “This is not a financial crisis,” Mr. Trump said. “This is just a temporary moment in time that we will overcome as a nation, and as a world.”
The president finished speaking at 9:12 p.m. ET. Twenty five minutes later, the NBA announced its plans to suspend play.
Just before the game between the Utah Jazz and Oklahoma City Thunder was set to tip off, Thunder executive Donnie Strack dashed onto the court toward the officials and shared disturbing news: Mr. Gobert, the Jazz center who was out with an illness, had tested positive for Covid-19.
American professional sports had a patient zero. The players were yanked off the court and would not return. “Take your time in leaving the arena tonight, and do so in an orderly fashion,” a voice boomed on the arena’s public-address system. “Thank you for coming out tonight. We are all safe.”
The shutdown of the NBA season—and an Instagram post hours later from actor Tom Hanks broadcasting that he and his wife, Rita Wilson, were sick—shocked many Americans who had viewed the virus as a distant threat.
TV network executives began working to assess the giant financial impact of losing the NBA—and how to fill their airwaves with other programming.
ESPN would consider: Could they get the rights to air WrestleMania from World Wrestling Entertainment Inc.? What about a seven-hour marathon of NFL game footage featuring Tom Brady?
Sean Connolly, the CEO of food maker Conagra Brands Inc., saw panic buying take off.
The hoarding started with dry goods like Chef Boyardee pastas and Hunt’s canned tomatoes, but quickly extended to his company’s Healthy Choice frozen entrees and Birds Eye frozen vegetables.
“It just skyrocketed,” Mr. Connolly said. “You name it, it’s moving.”
The rest of the professional leagues followed the NBA. Soon the NCAA basketball tournament was canceled. Disney said it would close all its theme parks.
Mr. Ackman, the hedge-fund manager, was in the middle of the biggest trade of his life. That morning he told his traders to unwind a bet he had made against the market. The bearish trade, made near the peak of the market in February, was worth more than $2 billion as stocks collapsed. He wanted it sold.
The billionaire investor, who runs Pershing Square Capital Management, had been nervous since early January. He had been scouring reports out of China and became alarmed when it was confirmed the then-unnamed virus could pass between people and live for days on surfaces.
He told employees to roll down the window when they took cabs. He worried about his mother and father, a lung cancer survivor, who moved into his penthouse off Central Park.
He urged companies in his investment portfolio, which include Hilton Worldwide Holdings Inc. and real-estate developer Howard Hughes Corp., to tap bank loans and build cash piles. Mr. Ackman did the same himself, calling a JPMorgan branch in New York City to withdraw cash.
Kraft Heinz Co. told retailers it was limiting orders to full pallets on certain products. Grocery chains couldn’t order 1.5 pallets of macaroni-and-cheese boxes anymore. They would need to order two. That helped the plants and warehouses pack and send off pallets faster.
Kraft Heinz added third shifts at many factories and limited the variety of Oscar Mayer lunch meats and other foods to maximize its production. “We are changing the rules by the minute,” thought Miguel Patricio, the CEO of Kraft Heinz.
Authorities recommended limiting groups to fewer than 250 people. Adam Aron, chief executive of AMC Entertainment Holdings Inc., decided his auditoriums would cap capacity at 50% even if they sat fewer than 500 people. AMC rewrote its ticketing software so moviegoers received a “Sold Out” message when that threshold was hit.
Doug McMillon was in a meeting in Walmart’s Bentonville, Ark., headquarters when he got a call from the White House. The Walmart CEO stepped out of the room to return the call.
Jared Kushner said the White House wanted Walmart to marshal its resources, along with other retailers, to help build a broader Covid-19 testing network. The spread of the virus was stretching the government’s ability to test patients. Retailers like Walmart had thousands of pharmacists who might be able to administer tests in their parking lots.
The next day, Mr. McMillon flew to Washington for a televised press briefing in the Rose Garden, along with other retail CEOs and members of the president’s coronavirus task force.
Mr. Trump declared a national emergency, opening access to as much as $50 billion in financial assistance for states, localities and territories. “No resource will be spared,” the president said.
The president called the Walmart CEO to the lectern.
It was “an out-of-body experience,” Mr. McMillon told colleagues afterward of speaking to the nation. At the end of brief remarks, the CEO turned to walk away but Mr. Trump reached out for a handshake.
The CDC had urged people for days to avoiding touching, at the risk of spreading germs. If the president wants to shake hands, you shake hands, Mr. McMillon thought. Chiding messages streamed into the CEO’s phone. In the pocket of his suit jacket was a miniature bottle of Purell.
In New York, Wall Street veteran Joe Amato woke up at 3 a.m. to check on Asian markets and never made it back to bed.
The president of Neuberger Berman Group LLC, a money manager with $350 billion in assets, had gone to sleep unsure where Wall Street was headed. The day before not only stock indexes close 10% lower but also Treasury yields rise—two contradictory moves that spooked him.
Futures were down early Friday morning but not by as much as feared. He thought the market might be snapping back. Traffic was light heading in to the firm’s Midtown office before sunrise. One of his senior managers noted his cab driver told him he’d been his first fare in three hours.
The virus had begun to disrupt daily life far from Sixth Avenue, where Neuberger employees typically elbow through crowds of Broadway-goers.
Cities were closing schools. Across the nation, lines snaked out the door for stores that sell groceries and other home supplies.
Smart & Final Stores Inc.’s previous daily sales record was the day before Thanksgiving 2018. That day, the food retailer doubled it. CEO Dave Hirz sent any available employee from its Los Angeles headquarters—those not mired in supply-chain hell—to restock shelves and help scrub down stores.
Mr. Hirz would soon put in orders for plexiglass screens to protect cashiers from customers and vice versa.
In his office, Mr. Amato and his colleagues watched the stock market turn abruptly during the Rose Garden briefing. The Dow gained 9.4% that day. Neuberger decided it still needed to keep some staff in the office to monitor the swings.
The market gyrations of the week reminded Mr. Amato of the panic he felt in 2008, when he was a senior executive at Lehman Brothers. There was one exception: People weren’t worrying about dying in the 2008 crisis.
The world’s biggest retailer, with more than two million workers and $500 billion in global revenue, had dealt with hurricanes and floods. This was different. It was the entire system under stress.
John Furner, CEO of Walmart U.S., reviewed the inventory coming in the door versus sales going out. His team discussed closing down some stores to direct supplies to bigger locations.
They decided to keep all stories open but close them at night—many are normally open 24 hours—to disinfect and restock shelves. The next week, Walmart said it needed to hire 150,000 temporary workers to keep up with the demand.
Ms. Grossman, the WW CEO, called her executives to discuss the changes they needed to make. WW was closing all 3,000 studios, the storefronts where members had gathered for decades to weigh in and share their weight-loss progress.
She spent five hours on a conference call working out how to create virtual studios and train 12,000 coaches to use streaming technologies. “We were not going to leave these people without support,” she said
Ms. Grossman was in Florida for her granddaughter Hannah’s baby naming ceremony. She missed much of the celebration, locked in the nursery on the phone.
‘ONE DOMINO AFTER ANOTHER FELL’
MGM’s board met via conference call. Officials in some states had begun ordering casinos to close, but no such order had been handed down yet in Nevada. Crowds still wandered the Strip that weekend.
Mr. Hornbuckle presented a plan to close down in 72 hours. The board pressed him to move faster. They settled on closing casinos in 24 hours and the hotels in 48. They’d been through this before—shutting Mandalay Bay after the Oct. 1, 2017, shooting and closing Mississippi properties in Hurricane Katrina—but never at this scale.
On a conference call with Mr. Trump, White House officials and food industry executives, Cargill’s Mr. MacLennan urged the USDA to ensure there would be enough inspectors for meat plants to continue operating. Around that time, Cargill recorded the first Covid-19 case among its employees.
Adrenaline kept Mr. MacLennan going. Hearing radio reports about orders to close restaurants, he wondered whether people would ever pack them again. Scenes of students partying on Florida beaches over spring break seemed weirdly out of place.
“It was like one domino after another fell,” he said.
To clear his head, Mr. MacLennan went running in his neighborhood and rode a Peloton cycle. His family instituted a new dinnertime rule: No Covid-19 discussions. “The boss can’t have a bad day,” he said.
The online orders were pouring in, ballooning to 10-times peak volumes at Rite Aid Corp.’s e-commerce warehouses.
“Tens of thousands of dollars in one order, buying up everything,” said Heyward Donigan, the drugstore chain’s CEO. She had been on the job less than seven months. Ramping up online sales was on her to-do list. But not like this.
Rite Aid’s online team set quotas on high-demand items like toilet paper and hand sanitizer. “We want everyone to have the opportunity to get at least something,” Ms. Donigan thought.
At 7 a.m., AMC said it would cap attendance in its theaters at 50 people. Mr. Aron had learned about the revised government guidelines, down from 250 people, the night before. Within hours there was a new recommendation from health officials: Limit gatherings to 10 people.
Mr. Aron saw little choice. AMC’s 635 U.S. locations wouldn’t open as of Tuesday. More than 30,000 showtimes scheduled for that day were canceled.
“How can you be socially responsible and stay open?” Mr. Aron asked himself.
By the next day, the three largest theater chains—AMC, Regal Entertainment and Cinemark—had closed operations.
The stock market was tanking, but John Schlifske, CEO of one of the largest insurance companies in America, Northwestern Mutual Life Insurance Co., wasn’t alarmed.
A 32-year veteran of the company, he had worked since January on a plan to stash away cash in the insurer’s $250 billion investment portfolio— and scoop up bargains in the downdraft he saw as inevitable.
Only a small fraction of Northwestern Mutual’s money is in the stock market in normal times. Most is in ultrasafe bonds, whose interest goes to pay out insurance claims. By the end of the week, the firm had added more than $1 billion worth of stocks and high-yield bonds. The buying binge steered clear of hospitality companies he figured would be hardest-hit by the virus.
Over the occasional bark from his German shepherd and interruption from one of his four teenagers, Mr. Schlifske took calls from financial advisers looking for guidance to reassure any panicky clients.
“We’re buying right now,” he told them. “Our company is 160 years old. We’ve seen pandemics. We’ve seen depressions.”
David Solomon, the chief of Goldman Sachs, had become his own barista. He used to swing by the Starbucks near his bank’s downtown Manhattan headquarters, but now he was making his preferred drink at his SoHo apartment.
The Wall Street veteran took four shots of decaf espresso and almond milk, over ice, and poured it into a Yeti supercooling mug. He dialed his chief financial officer, Stephen Scherr.
“Do it,” he said. Borrow $1 billion from the federal government.
Goldman and seven other big banks had decided to take the plunge together, borrowing from the Fed’s “discount window”—an emergency fund that was last used at size during the 2008 crisis. None needed the money, but they might before this was over. By doing it now, they would rid the exercise of stigma.
A few hours later, the money landed at Goldman’s account at the New York Fed.
FedEx executives gathered in a war room in a four-story Memphis office building, each sitting 6 feet away from the next.
After markets closed, finance chief Alan Graf told investors FedEx was withdrawing its financial forecasts, the first time in the company’s 50-year history. It was a move that dozens of other major companies from Ford to Domino’s Pizza Inc. would soon make.
The next evening, the head of human resources called Mr. Smith, the CEO, at his home with the news he knew was coming: An employee in that building had tested positive for Covid-19. Mr. Smith ordered all employees to work from home, and commissioned a thorough cleaning. He was back in the office on Sunday for a TV interview.
Running out of financing options, Boeing turned to the federal government to ask for taxpayer help. The plane maker had already drawn down a $13.8 billion loan. It wanted at least $60 billion for itself, its suppliers and the broader aerospace sector.
The request emerged from discussions top Boeing leaders had with Trump administration officials as plans for a stimulus package took shape. It spurred the resignation of director Nikki Haley, surprising senior company leaders.
The former United Nations ambassador wrote to the CEO: “I cannot support a move to lean on the federal government for a stimulus or bailout that prioritizes our company over others and relies on taxpayers.”
Mr. Stephenson was scanning a list of AT&T’s retail stores, trying to figure out which to close. Some had to stay open; AT&T runs a network that gives priority access to first responders—and they needed cellphones.
“Nobody should have to drive more than 30 minutes to get to us” he told his No. 2, John Stankey. They cross-referenced locations and population data and figured they could make do with about one-third of stores open. They closed the rest and ordered more hand sanitizer for the ones still open.
That night Mr. Stephenson toggled between CNN, which he owns, and an episode of “The West Wing,” which he’d been bingeing in his scarce downtime.
Mr. Amato, Neuberger’s president, was one of only a handful of employees in the investment firm’s Manhattan headquarters. He spent it watching the market tumble again.
Mr. Amato recorded a video for his own employees, sharing the firm’s money managers’ views on the markets and the economy. He took a car back to his New Jersey home for a quiet dinner with his family. It was his 58th birthday.
Arne Sorenson was near tears as he shared the news with employees. It was the first time many of them had seen their boss since he had started treatment for pancreatic cancer in 2019. He was bald and gaunt. His shirt gaped at the collar.
“I have never had a more difficult moment than this one,” the CEO of Marriott, the world’s biggest hotel operator, said in a video to his staff.
Marriott’s business had fallen 75%, a plunge steeper than the post-Sept. 11 period and financial crisis combined. The company would be furloughing nearly all its workers.
The sudden evaporation of travel wiped out in a matter of weeks all the profits many hotel companies piled up. On March 19, the U.S. warned Americans against all international travel. Marriott executives were scrambling to close down hotels and cut as many costs as possible.
“Covid-19 is like nothing we have ever seen before,” Mr. Sorenson told his staff. “For a company that is 92 years old, that has borne witness to the Great Depression, World War II and many other economic and global crises, that’s saying something.”
Pfizer researchers dialed in from their workstations, demarcated by fresh circles of yellow paint on the floor. “I want a vaccine in six months,” Mr. Bourla, the CEO, told them. Even if the virus quieted over the summer, it would likely be back in the fall. Oct. 1 was their deadline for a process that usually takes years.
The 58-year-old tried to deliver the same rallying cry in person at a Massachusetts plant that churns out Pfizer’s blood-clotting drugs. The plant manager told him he was nonessential and deactivated his pass.
Mr. Bourla sent a video message instead and gave them a week to come up with a plan to manufacture hundreds of millions of doses. “If not us,” he said, “Who?”
Directors at tobacco giant Altria Group Inc. dialed in by phone in the afternoon to learn the latest: Altria’s chairman and CEO, Howard Willard, had tested positive for the coronavirus. The 56-year-old wasn’t well enough to be on the call.
Billy Gifford, Altria’s finance chief, would take the reins temporarily. As a 26-year veteran of the company, he knew the business and had been part of the board’s succession planning before the crisis.
He would be working from quarantine, because Mr. Gifford, like other members of the leadership team, had come in contact with his boss before they had all begun to work from home.
There was more: Mr. Gifford told the board that two employees from Altria’s cigarette business had tested positive. The factory where Marlboros are made would shut for two weeks. The company had a two-month inventory of cigarettes on hand.
Baristas at Starbucks flooded online chat forums, sharing concerns about still having to serve the public as the virus spread. Thousands signed an online petition for the company to close its stores, and threatened a walkout the following Monday.
Around 4 p.m. in Seattle, the company said it would close nearly all of its company-owned U.S. cafes, keeping its drive-thrus open and switching to delivery. It promised to pay baristas for 30 days whether they showed up for work or not.
Mr. Johnson, the CEO, said the actions weren’t prompted by the boycott threats by employees, nor was he aware of them at the time. “There was a realization that this would come at a cost, but it was based on principle,” he said.
The next morning, he woke up at 5 a.m. to meditate, worried that employees wouldn’t show up in sufficient numbers. A few hours later, one of his lieutenants texted: Of the stores that the company determined could safely open, 95% did.
Lineage Logistics, America’s biggest cold storage company, moved its U.S. warehouses from two breaks per shift to six to thin out break rooms.
Masking-tape X’s on the floor ensured social distancing. Any violation of the 6-feet rule would be entered into Lineage’s safety log as a “near miss,” the same designation required by federal workplace-safety regulations when a forklift barely avoids hitting someone.
Greg Lehmkuhl, Lineage’s CEO, knew enough to take the virus seriously. He had gotten sick 48 hours after returning from a trip to Amsterdam in February.
The 47-year-old sweated through towels at night and dialed into a Feb. 25 board meeting shivering in front of the fireplace in his Detroit home.
His wife made him nachos, slathered with hot sauce that he couldn’t taste, a side effect of Covid-19. There were no tests, but he assumed he was infected.
In California, Mr. Hirz, the Smart & Final grocery-chain CEO, replaced the copy in the weekly flier. Instead of price specials, he placed help-wanted ads. He told his store managers they could hire on the spot, skipping background and drug checks.
‘DON’T BEAT AROUND THE BUSH’
Uber bookings plunged as the month progressed. The company’s thousands of gig workers demanded broader employment protections. Uber had agreed on March 6 to compensate drivers infected or quarantined with up to two weeks of missed pay. Rival Lyft Inc. followed.
Mr. Khosrowshahi spent the weekend calling more than a dozen congressmen appealing that his drivers be covered for assistance under the stimulus package. It culminated in a letter to the president.
Mr. Ackman, the hedge-fund manager, phoned into a board meeting of Howard Hughes, the real-estate developer where he is chairman. A month earlier, he had told the company’s management to model out what would happen if they had to close their Houston hotels and the South Street Seaport restaurant and bar area in New York City; both had now happened.
The models showed the company could run dangerously low on money by the end of the year. Mr. Ackman agreed to invest $500 million. By week’s end, bankers wrangled another $100 million from outside investors. Howard Hughes had more than $1 billion of cash to see it through.
Boeing said it would suspend Seattle-area plane production for two weeks. As the month dragged on, more and more Boeing employees tested positive for Covid-19, many of them at its Everett, Wash., factory. Several hundred wound up in quarantine. One factory worker died from suspected complications from the illness.
Mr. Corbat, the Citigroup chief, decamped to his home. Until then, he had stayed put in the company’s nearly deserted headquarters. He first had to get his own technology in order: His son and daughter-in-law were staying at the home, and bandwidth was running low. He ordered more routers and deputized his son, Brian, as tech support.
After weeks of war gaming, Mr. Wirth had made his decision. Chevron would ax $4 billion from its budget, a 20% reduction, stop buying back its shares and reduce oil production in its U.S. shale fields. Layoffs loomed.
He announced the decision in a video to his 45,000 employees that day, remembering the advice of past Chevron leaders to constantly communicate. “If you have bad news, don’t beat around the bush,” he thought.
“There aren’t enough products to go around,” said Dan Florness, chief executive of Fastenal Co., a distributor of industrial equipment including mission-critical items such as safety goggles, respirators and gloves.
He decided to cut off some of the company’s longtime manufacturing and construction customers on safety-related items to focus on supplying health-care companies and first responders. Some customers complained.
“I’m worried about our economy, the safety of our society,” he said. “I’m worried about my 90-year-old mom and my family.”
Mr. Trump signed a $2 trillion rescue plan, the largest relief package in U.S. history. It extended aid to millions of Americans through direct payments and expanded unemployment benefits. It also provided loans and grants to small and big businesses, including beleaguered hospitals and airlines.
The surging number of coronavirus infections left hospitals short on masks for health care workers and ventilators for patients. Mr. Trump ordered General Motors Co. to produce ventilators.
Gap Inc. and Kohl’s Corp. followed Macy’s in saying they would furlough the majority of their employees and extend store closures.
The Macy’s board had met by phone on Friday, March 27. Executives felt the stimulus package’s aid to unemployed workers combined with Macy’s decision to continue paying health benefits would provide a cushion for employees.
Mr. Gennette, the CEO, had originally hoped stores would reopen by April 1. As the virus spread, it became clear that wasn’t going to happen.
They also looked at what happened in countries that had started to recover such as China and South Korea. Rather than a burst of pent-up demand, shoppers were coming back slowly. Mr. Gennette realized that when stores reopened, they might come back with lower sales.
Macy’s moves helped the retailer cut its cash burn rate by half. Mr. Gennette and his team turned to seeking rent relief from landlords and refinancing debt.
“What we are doing in a day are decisions that used to take us weeks,” the CEO said. “It’s coming at us so fast.”
Goldman’s Mr. Solomon watched from the 41st floor as the U.S. Navy hospital ship Comfort floated into New York harbor. “Here comes the cavalry,” he said to no one, and snapped a photo.
‘IT’S JUST NOT POSSIBLE TO PREDICT’
United canceled more than 70% of its flights on the last day of the month, and those that did take off were just 15% full on average. The airline carried 30,000 passengers that day, compared with the roughly 600,000 it would typically fly at this time of year.
Mr. Kirby was starting at around 4:30 a.m. and going for runs. With the airline’s Chicago office closed, he was spending most of his day on the phone walking around his Dallas neighborhood on call after call. He logged about 25,000 steps a day. “I spend the whole time trying to figure out how to keep my phone charged,” he said.
Mr. Hirz, the grocery CEO, was relieved to see canned vegetables on the shelves. Strolling around one of his stores in Montebello, Calif., it was the first time that aisle was fully stocked in weeks. The only worry sign was a shortage of 10-pound bags of potatoes.
At the other end of the food-supply chain, Conagra raised its revenue forecasts. Initially, executives thought the spike in demand would last for a week or two, and then shoppers would have hoarded enough to fill their pantries and freezers. That didn’t happen.
Conagra’s factories were running seven days a week. Because people have been stuck at home, they were going through the food they bought and going back to the store to stock up on more. In the four weeks that ended March 22, Conagra’s retail sales and shipments each rose about 50%.
How long will it last? “It’s just not possible to predict,” Mr. Connolly said.
Uber anticipates an 80% year-over-year decline in its rides business for as long as the pandemic goes on. The company is encouraging its drivers to become food-delivery carriers. Mr. Khosrowshahi is also calling other CEOs to ask if they can hire them. “March has been a blur,” he said.
At Citigroup, Mr. Corbat’s dashboard, which spits out up-to-the-minute stats on the bank’s global empire, showed a splintered organization.
The headquarters building, which typically hosts 12,800 people, had just 400 in it. Half came from cleaning, security and operations. Instead, 120,000 people were logged remotely into the system.
New York City was now the epicenter of the outbreak in the U.S. It ended the month with more than 40,000 confirmed Covid-19 cases.
That evening, in the final hours of March, Mr. Trump held a press conference and promised “we will prevail, we will win.”
He added: “This could be a hell of a bad two weeks. This is going to be a very bad two, and maybe even three weeks. This is going to be three weeks like we haven’t seen before.”
Wall Street Journal Staff,
04 April 2020