Spotlight on Business Headlines
U.S. AUTOMAKERS LEARN FROM MISTAKES IN THE PAST TO PERSEVERE THROUGH PANDEMIC
NFL RELEASES 2020 SCHEDULE WHILE OTHER SPORTS REMAIN SUSPENDED
UNDER ARMOUR SALES STRETCHING THIN
THE ECONOMIC EFFECT OF COVID-19
I n 2019 the economy on both sides of the bor - der was showing signs of slowing however, many companies entered 2020 with aggressive business plans reasons, optimistic on a strong economy and expansion in the new year. Construction was up and retail sales were up with consumer spending reaching record levels of $13.28 trillion in the U.S along in 2019. Then came the COVID-19 outbreak which has deliv - ered an unprecedented blow to the economy. Unemployment rates that were at record lows in February of this year have hit levels not seen since the Great Depression on both sides of the border. The COVID-19 pandemic has exceeded many of the worst-case scenarios that businesses both large and small were planning on. Instead of a gradual slowdown in efforts to contain the virus the swift outbreak created a crisis that has forced companies to close stores for weeks, lay off employees, shrink budgets and shift to other business models grind- ing much of the economy to a halt. Now that things are starting to open up, the effects of the virus will likely trigger an economic hangover that could last for years and permanently changing how companies do business moving forward as we get back to the new business as usual, whatever that will be.
T he U.S. auto industry is drive on unchart- ed roads these days as not even the Great Recession or the bankruptcies of General Motors and Chrysler has the automotive industry seen such a production and sales standstill as it has seen during the current COVID-19 pandemic. Since the outbreak U.S. automakers are losing billions of dollars every month as production has stopped at the majority of American facto- ries since March add to that, mandated social distancing have dealer showrooms running on a limited basis or closed altogether and high un- employment has customers deferring or deflat - ing on payments. No industry could have prepared for COVID-19, but the U.S. automakers are persevering through the pandemic without talk of bankruptcies or the need for extreme government financial aid need - ed to keep most afloat back in 2008 and 2009. Looking for ways to save cash, some U.S. auto - makers have suspended their quarterly dividends payments, along with cutting executive pays and setting up deferred pay program for salaried workers, amid other actions to preserve cash and avoid laying off salaried workers.
T he National Football League released its upcoming 2020 regular-season schedule sending the message that the league is tar- geting to start their upcoming season while most major league sport leagues and the rest of the U.S. is still under lockdown orders due to the coronavirus pandemic. However, the NFL is not the only sport organi - zation making news that they are getting ready to get back to business as NASCAR plans to for its first races back since the COVID-19 outbreak when Cup Series resumes at Darlington Raceway in South Carolina on May 17th without fans in the stands. Meanwhile, other professional leagues like the National Hockey League, National Basketball Association and Major League Baseball have yet to solidify their plans to return to play after sus- pending their seasons in March.
U nder Armour reported that the company’s sales decline of 23% during its first quarter as its business took a blow from the coro- navirus pandemic which has it brick and mortar locations forced to close their doors putting a freeze on the company’s turnaround plans. The athletic apparel company announced that it plans to cut about $325 million in operating costs in 2020 to help it weather the crisis. Unfortu- nately, that includes temporarily laying off some retail employees. The company predicts the second quarter to be the most challenging to work through and ex - pects revenue could be down as much as 50% to 60%.
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JUNE 2020 • SPOTLIGHT ON BUSINESS MAGAZINE
SPOTLIGHT ON BUSINESS MAGAZINE • JUNE 2020
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