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Diverse Companies Join Forces to Fight Coronavirus Menace

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The world economy has been dealt a huge blow due to the coronavirus disease (officially named as COVID-19), which has spread across 199 countries. The International Monetary Fund has recently expressed concerns that the virus outbreak has brought the world economy on the brink of a recession.

Major stock indexes worldwide are mirroring the nervousness caused by the pandemic. Since mid-January, the Shanghai Composite index (the stock exchange of China) has lost 10.3% while the Italian stock exchange — Borsa Italiana — has declined 26.9% since mid-January. Stock indexes in the United States too are in the red. While the S&P 500 has declined 24.7%, the NYSE and NASDAQ have moved down 25% and 15.8%, respectively, during the same period.

Virus Outbreak’s Impact on U.S. Industry and Corporates

Multiple industries, including airline, entertainment and tourism, have been hit hard. It is worth mentioning here that the commercial airline service providers — grouped under the Zacks Transportation – Airline industry — have dipped 47.8% since mid-January. The Zacks Hotels and Motels industry has declined 39.6% during the same timeframe.

Conglomerate General Electric Company (GE - Free Report) believes that the virus outbreak will lower its industrial free cash flow by $300-$500 million and operating profit by $200-$300 million in the first quarter of 2020. The Zacks Rank #3 (Hold) company’s aviation unit has taken aggressive cost-saving measures, including job cuts, to deal with lost business opportunities. However, its healthcare unit has decided to increase the production of scanning and other monitoring products, including mobile X-ray systems, ventilators, CTs, patient monitors and ultrasound devices.

Amid the headwinds, the U.S. government’s emergency package of $2 trillion is anticipated to support companies in the aviation and healthcare industries. Also, other beneficiaries of the rescue package are the U.S. workers, local governments and small businesses. The Federal Reserve also earlier announced emergency cuts in interest rates, eventually bringing it to zero to provide some stimulus to the weakening economy.

At corporate levels, measures — including donations, scaling up production (of medical equipment, personal protection equipment and others) and others — are being considered to combat the impacts of the pandemic.

Also, companies from diverse fields are collaborating to fight the virus outbreak. A few associations are mentioned below.

Collaborations Worth Mentioning

A couple of days back, Dearborn, MI-based Ford Motor Company (F - Free Report) — the designer and manufacturer of cars, trucks, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles — announced its association with 3M Company (MMM - Free Report) and General Electric’s GE Healthcare.

This Zacks Rank #3 company along with 3M will work on increasing the production of powered air-purifying respirators (PAPRs). Also, the companies will work on a new design of PAPRs, which can be produced at Ford Motor’s manufacturing facility in Michigan. You can see the complete list of today’s Zacks #1 Rank stocks here.

Additionally, the automaker along with GE Healthcare will concentrate on scaling up the production of ventilators. The product is the simple version of ventilators produced by GE Healthcare. Further, Ford and UAW will work on assembling 100,000 plastic face shields every week. The shields, manufactured at Ford’s facility, will be for the safety of store clerks, medical professionals and factory workers.

Another collaboration worth mentioning is that of Vir Biotechnology, Inc. (VIR - Free Report) — a clinical-stage immunology company — with Biogen Inc. (BIIB - Free Report) — a leading biotechnology firm. The companies are working on the development of treatments for coronavirus.

General Motors Company (GM - Free Report) — one of the largest automakers in the world — associated with Ventec Life Systems to work on increasing the production of ventilators. The respiratory supports will be a big help in the fight against the coronavirus outbreak.

Further, many leading technology firms, including Microsoft Corporation (MSFT - Free Report) , and the World Health Organization are working to bring software developers together through a hackathon. The initiative has been taken to develop software, which can help in dealing with problems related to the virus outbreak.

There are other initiatives taken by various companies to help contain the coronavirus outbreak. 3M Company is also working toward increasing the production of respiratory masks in their capacities.

A French company, specializing in making perfumes and luxury goods, LVMH ventured into making sanitizers, which are to be distributed in the country’s hospitals. The sanitizers will be made at LVMH’s cosmetics and perfume factories.

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