Company news in brief

ArcelorMittal SA cuts salaries

ArcelorMittal South Africa has issued force majeure notices to customers and suppliers "where appropriate" as a nationwide three-week lockdown impacts Africa's biggest steel producer.

Triggering a force majeure clause in contracts allows certain terms of an otherwise legally binding agreement to be ignored because of unavoidable circumstances.

"While the need for such action is clear and supported, it will result in further challenges over and above the effects of an already struggling economy and the economic impact of Covid-19 globally and locally," the company said in a statement on Friday.

ArcelorMittal South Africa also said on Friday it has cut salaries for all employees, effective this month, for a "likely" period of three months.

Anticipating an impact from the new coronavirus on the South African economy, the firm also said it would cut spending on noncritical goods and services. – Nampa/Reuters

FedEx hoards cash, slashes CEO pay

FedEx Corp said on Friday it would pull US$1.5 billion from a credit line and slash CEO pay as stay-at-home orders aimed at stemming the spread of the coronavirus in the United States and Europe hammer demand for its lucrative express services.

The Memphis-based delivery company said it would tap debt markets to bolster reserves as the pandemic slams its higher-profit business-to-business shipments, while driving up demand for low-margin home deliveries. Its board also approved a 91% reduction in chief executive Frederick Smith's base salary for six months starting April 1, according to a regulatory filing on Friday.

The global health crisis has compounded woes at FedEx, which already was struggling to integrate TNT Express, grappling with the high cost of launching Sunday home delivery, and compensating for the loss of Amazon.com Inc as a customer.

FedEx and larger rival United Parcel Service have asked the US Treasury to move quickly to release billions of US dollars in government grants and loans to support the sector.

FedEx said it expects to benefit from excise tax relief and payroll tax referrals. It is also eligible for government grants, loans and investment programmes. – Nampa/Reuters

Mexico stops brewing Corona beer

Mexico's Grupo Modelo said on Thursday it will temporarily stop brewing Corona beer and other brands exported to 180 countries after its business activities were declared non-essential under a government order aimed at curbing the spread of the coronavirus.

The brewer said in a statement that the suspension will go into place from yesterday and that it was already in the process of scaling down production to a level at which it could resume once the suspension is lifted.

"If the federal government considers it appropriate to issue some clarification confirming beer as an agro-industrial product, at Grupo Modelo we are ready to execute a plan with more than 75% of our staff working from home and at the same time guaranteeing the supply of beer," the statement said.

Agriculture and food production in general are considered essential activities.

Grupo Modelo, which is part of the brewing group Anheuser-Busch InBev, operates 11 breweries in Mexico. – Nampa/Reuters

Starbucks franchise suspends 1 600 jobs

The company that holds the franchise for Starbucks in Chile has suspended the contracts of 90% of its employees in the country, where most cafes are shut as part of efforts to fight the coronavirus epidemic, local media and a union said on Friday.

Mexico's Grupo Alsea said it would honour March salaries and pay 10% of salaries for Chilean Starbucks workers in April, according to a statement seen by local newspaper Diario Financiero.

Grupo Alsea said the move was a "responsible measure" aimed at safeguarding positions across more than 120 outlets around Chile and it hoped to restart the contracts once the coronavirus crisis had passed, the statement added.

A union representing Starbucks workers said in a statement sent to Reuters that the suspension affected 1 600 people, around 90% of the franchise's Chilean workforce.

Andres Giordano, president of the union, said the company continued to do business through deliveries and its "arbitrary" action, without discussion with the union, had "heightened uncertainty for workers and their families." – Nampa/Reuters

United slashes New York-area flights

United Airlines said late Saturday it will drastically reduce flights to two New York City airports amid the coronavirus outbreak.

United said starting yesterday it will go from 157 daily flights total at Newark and New York LaGuardia to just 17.

Newark, the airline's hub in the New York area, will drop from 139 daily flights to 62 destinations to 15 flights a day to nine destinations, while LaGuardia will go from 18 to 2 flights a day.

United said regardless of whether employees are on duty, the airline will maintain pay and benefits of local employees in those locations. The reductions will be in effect for at least three weeks.

Last Monday, low-cost US carrier Spirit Airlines Inc said it was cancelling all flights to and from New York, Connecticut and New Jersey after US officials warned against travel to the area because of the Covid-19 pandemic. – Nampa/Reuters