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In no particular order and with varying degrees of urgency, here’s a list of companies that have just in recent days said they are under extreme stress as a result of the coronavirus shutdowns.
These are companies that are in crisis: undergoing massive layoffs, posting record losses, and in some cases, filing for bankruptcy.
Massive conglomerates
Disney’s parks are closed, its movies aren’t in theaters, its cruise ships aren’t at sea. The company said Tuesday that its profit plunged 91% in the first quarter. (It also said its Shanghai park will reopen next Monday.)
GE is permanently cutting a quarter of its global workforce.
Clothing companies
J. Crew filed for Chapter 11 bankruptcy protection Monday.
The Gap is running out of money and stopped paying rent.
Retailers
J.C. Penney has missed debt payments and is in negotiations with lenders.
Neiman Marcus has a crushing debt load.
Sears has been distressed for years.
Food
Tyson Foods has warned of more meat plant closures even as Trump invoked the Defense Production Act to keep plants open.
Fitness
Gold’s Gym filed for bankruptcy.
Foreign airlines
Lufthansa is losing $1 million an hour.
Domestic airlines
United says employees should consider voluntary separation and also laid off a third of its back office staff.
Boeing, which was already in trouble because of problems with its 737 Max, will cut 16,000 people.
Cruise lines
Norwegian Cruise Line’s accounting firm said in a government filing that it may go out of business.
Hotels and housing share services
Airbnb announced massive layoffs. Marriott and Hilton have both furloughed employees.
Autos
Hertz got an emergency lifeline from lenders. Car companies are having difficulty too. Ford told investors it will lose $5 billion next quarter.
Oil companies
If oil stays extremely cheap, hundreds of US oil companies could go bankrupt.
Not all companies are under stress. Amazon views itself as part of the national shelter-in-place infrastructure and it is reaping handsome rewards. It’s making $10,000 in sales every second, according to one estimate.
What happens in bankruptcy?
In some cases, the coronavirus pandemic is pushing companies on the brink into bankruptcy. But just because a company files for bankruptcy doesn’t mean it will cease to exist. CNN’s Chris Isidore, a certified expert in covering bankruptcies, explains what’s likely to happen to companies that file Chapter 11:
Companies use bankruptcy to shed debt and other liabilities, including money that they owe vendors. They can also use it to void contracts they can no longer afford, including labor deals and leases on property.
They can close locations or units of the company that can’t be saved. Many companies that file for bankruptcy go on to be profitable. General Motors has had its most profitable years since its 2009 bankruptcy.
But many other companies that file for bankruptcy intending to stay in business fail to get court approval of their turnaround plans and go out of business. And even some companies that are able to emerge from bankruptcy are forced to file again in the future and eventually go out of business.
Where’s the beef?
Food businesses are having a different kind of trouble: One in five Wendy’s hamburger restaurants is out of meat. You literally cannot get a hamburger at many Wendy’s. That’s bad for Wendy’s.
It’s less bad for grocers, but it’s still a sign of things changing radically for American consumers, who are used to being able to get what they want when they want it. Costco is limiting meat purchases. Covid-19 vegetarians? It’s a thing.
Note that despite the President saying he would invoke the Defense Production Act to keep meat plants open, the Trump administration has yet to keep any meat plants open. And meat processing plants continue to have problems keeping their workers safe.
That’s why Tyson Foods warned that more closures will be coming.
Can we handle a second lockdown? A third?
Infections that happen today or tomorrow won’t present right away. It will take two weeks or more to know if it is spreading right now. That’s part of the reason this virus is so dangerous. But CNN’s Holly Yan dives a bit deeper. She looks at countries that began easing restrictions and then had to reimpose them because the virus started spreading again, and going back to anything like normalcy now means more people get sick and more people die.
More of CNN's coronavirus coverage
The ugly trade-off of this pandemic was bluntly vocalized by Dr. Anthony Fauci on CNN Monday night, the same day we looked at the growing death toll projections related to Covid-19 – one key model has factored in the opening of US states and said the toll will be more than 100,000 Americans.
“How many deaths and how much suffering are you willing to accept to get back to what you want to be some form of normality sooner rather than later?” he asked Chris Cuomo. Watch the whole thing here.
UPDATE: This story has been updated throughout to better reflect the severity of the crisis faced by the businesses mentioned.
