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G.M. Suspends Production Indefinitely and Cuts Paychecks: Live Updates

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General Motors said on Thursday it would suspend production at its North American factories indefinitely, lay off 6,500 salaried employees and cut executive pay, signaling that the automaker believes that coronavirus will take a serious toll on its business.

“We are actively monitoring the situation and the possible impact of the crisis on consumer demand,” a G.M. spokesman, David Barnas, said. “When we can safely resume production, we will.”

G.M. and other automakers shut down their North American plants in the last few days in an effort to prevent the spread of the virus. Most had hoped to restart production next week, but have now scaled back those plans.

Ford Motor aims to restart production at several plants across the United States on April 14, and a plant in Mexico on April 6. Fiat Chrysler said its plants would stay closed until April 14, “dependent upon the various state stay-in-place orders and the readiness of each facility to return to production.” Toyota Motor said its North American plants would remain closed until at least April 17.

The United Automobile Workers union has been pushing G.M., Ford and Fiat Chrysler to keep their plants closed.

“The only guideline in a boardroom should be management asking themselves, ‘Would I send my family — my son or my daughter — into the plant and be 100 percent certain they are safe,’” Rory Gamble, the union’s president, said in a statement.

To cut costs, G.M. said it was suspending development work on some new models. Senior executives will take a pay cut of 5 percent or 10 percent, and defer 20 percent of their salaries to be paid at a later date. The 6,500 salaried put on furlough will receive 75 percent of their normal pay.

Ford has taken similar steps, deferring salaries of its top 300 executives.

Boeing is up nearly 90 percent this week. American Airlines has jumped almost 50 percent. Carnival Corporation has soared nearly that much as well.

Wall Street has been in rally mode, as investors bid up shares of companies that were set to receive support from Washington’s $2 trillion coronavirus aid bill.

With the package advancing through the Senate, the gains continued on Thursday. The S&P 500 climbed 6.2 percent, even after the government reported a staggering jump in unemployment claims by workers.

As it has been all week, investors’ focus was on companies likely to get help from the spending plan that passed the Senate on Wednesday night. The House of Representatives and President Trump are expected to approve it.

Boeing rose nearly 14 percent on Thursday because the package specifically sets aside $17 billion for “businesses critical to maintaining national security” — language that was seen as intended at least partly for the aircraft manufacturer and key Pentagon contractor.

Other companies that were hit hard in the early days of the coronavirus outbreak continued to soar. American and Delta Air Lines rose nearly 2 percent. Carnival was up about 14 percent.

The gains on Thursday also spread to Europe, with major benchmarks there reversing their losses to end the day sharply higher. The FTSE 100 in Britain climbed more than 2 percent.

The three-day rally has lifted the S&P 500 by more than 17 percent, its best such run since 1933, according to data from Howard Silverblatt, senior index analyst for S&P Dow Jones Indices. Most of those gains came on Tuesday, when stocks rose 9.4 percent, amid growing hope that the large stimulus package would offer support to an economy crippled by the outbreak and efforts to curtail the spread of the virus.

But the economic crisis is perhaps the most daunting since World War II. On Thursday, a government report showed a record rise in weekly applications for unemployment benefits, which jumped to nearly 3.3 million from 282,000 in a week.

Until now, the record occurred in the fall of 1982, when 695,000 Americans applied for benefits in one week. At that point, the United States was more than a year into a recession, and the unemployment rate had passed 10 percent.

The numbers, released by the Labor Department on Thursday, are some of the first hard data on the economic toll of the coronavirus pandemic, which has shut down whole sectors of American life.

Lawmakers put some restrictions on the compensation of executives whose companies receive government assistance under the bill, in an effort to address one of the criticisms about bailouts of banks and other companies during the 2008 financial crisis. But the limits will not do away with multimillion-dollar paydays for corporate bosses.

  • Executives who made more than $3 million in 2019 could be awarded $3 million, plus half of any sum in excess of $3 million. As a result, a chief executive who earned $20 million in 2019 would be allowed compensation of $11.5 million, or $3 million plus half of $17 million per year.

  • Companies receiving assistance will not be allowed to increase the compensation of executives who earned $425,000 to $3 million in 2019 until a year after government support ends.

The package includes more than $370 billion in much-needed help for small businesses. The bill will allow banks to lend directly to businesses, and those loans will be backed by the Small Business Administration.

  • It could take at least two weeks after the bill is signed into law for the money to begin flowing.

  • Small businesses would not have to repay portions of loans that were spent on paying employees, a mortgage, rent or utilities. The banks lending the money would be reimbursed for those portions by the Treasury Department.

The role of banks in the rescue bill is to provide much-needed capital to businesses and taxpayers. “This is all about preserving the incentives for banks to lend,” said Mike Mayo, who researches large banks for Wells Fargo.

  • To ensure access to cash is not hampered by a raft of new client demands or market developments, the Fed has encouraged banks to use the so-called discount window, its lending operation for big banks, and at least eight major financial institutions already have.

  • Banks can opt out of observing new federal accounting standards for estimating future credit losses during the period covered by the law, a rule known as Current Expected Credit Losses.

  • The bill revives a crisis-era program to guarantee all bank debt, a move that once again puts taxpayers on the hook if a bank runs into trouble.

The nearly 3.3 million new jobless claims filed last week dwarfed any previous weekly figure. Until now, the record occurred in the fall of 1982, when 695,000 Americans applied for benefits in one week. At that point, the United States was more than a year into a recession, and the unemployment rate had passed 10 percent.

In that case, the recession was caused not by a health crisis, but by a decision by political leaders and the Federal Reserve that raging inflation had to be shoved down, despite the cost to workers. The central bank sharply reduced the money supply while benchmark interest rates neared an astounding 20 percent.

Industries that relied heavily on borrowing like construction and manufacturing were hit hard. The jobless rate in construction reached 22 percent; among autoworkers, it was 24 percent.

Today, the circumstances are markedly different. Despite uneven rewards, the economy had achieved the longest expansion in history. The jobless rate had been below 4 percent for more than a year. A preoccupation of the Fed was raising the persistently low inflation rate toward 2 percent. Interest rates are near zero.

Efforts to slow the spread of the coronavirus meant the service industry bore the initial brunt of layoffs — workers at restaurants, bars, hotels, nail salons, gyms and more.

With theater chains shuttered across the country and the box office declared dead, the National Association of Theatre Owners knew the only way for their businesses to survive was to become the recipients of a federal relief package.

So the trade association engineered an aggressive lobbying campaign that employed two law firms and a public relations agency. The group also coordinated an aggressive letter-writing campaign and call operation that had theater owners of all sizes reaching out to members of Congress.

But perhaps the pièce de résistance was the opinion article that the filmmaker Christopher Nolan wrote for The Washington Post reminding Congress that the movie business was not just about Hollywood and celebrities. Calling the moviegoing experience “a vital part of social life, Nolan wrote, “The movie business is about everybody: the people working the concession stands, running the equipment, taking tickets, booking movies, selling advertising and cleaning bathrooms in local theaters.”

“We plastered that all over Congress,” said the theater group’s chief executive, John Fithian. “A lot of these members are fans of movies and movie theaters. Hearing from the directors was a moving thing for us to use.”

THE AID PLAN

How much money will individuals get — and how will it be distributed? How are unemployment benefits changing? Are gig workers included?

The Senate unanimously passed a $2 trillion economic stimulus plan on Wednesday that will offer assistance to tens of millions of American households affected by the coronavirus. Its components include payments to individuals, expanded unemployment coverage that includes the self-employed, loans for small businesses and nonprofit organizations, temporary changes to withdrawal rules from retirement accounts, and more.

The House of Representatives was expected to quickly take up the bill and pass it, sending it to President Trump for his signature.

  • The surge in interest in video games by people sheltered at home has led to a shortage of Nintendo Switch consoles at retailers like Best Buy and Target. Nintendo of America acknowledged the lack of availability and provided some hope to gamers, saying in a statement, “Nintendo Switch hardware is selling out at various retail locations in the U.S., but more systems are on the way. We apologize for any inconvenience.”

  • Some banks are adding job security to the list of things their employees are getting in exchange for working through the coronavirus crisis. James Gorman, the chief executive of Morgan Stanley, told employees in a memo that the bank would not resort to layoffs in 2020, according to a copy seen by The New York Times. Citigroup is taking a similar, though smaller step. A spokeswoman said that the bank had suspended any planned layoffs — for now.

  • Hilton Worldwide Holdings said on Thursday that it was furloughing or reducing the hours for much of its corporate staff for 90 days starting on April 4. Furloughed employees will maintain health benefits. Staff that isn’t furloughed will have their pay reduced by 20 percent for the duration of the crisis. The company will suspend dividends and share buybacks. Hilton’s chief executive officer, Christopher Nassetta, will forgo his salary for the rest of the year.

  • AT&T announced it would pay a 20 percent bonus to all union employees, including those in the field or working from home. The company didn’t divulge how many workers that would cover, but it had bargaining agreements with about 100,000 employees as of March.

  • Cargo volumes at the Port of Los Angeles, one of the largest in the United States, are about 80 percent below normal, Gene Seroka, its executive director, said. The effects of the coronavirus pandemic coupled with what an “ill-advised” trade war with China will suppress cargo traffic throughout the year, he added.

Reporting was contributed by Marc Tracy, Neal Boudette, David Gelles, Niraj Chokshi, Vindu Goel, Kate Kelly, Peter Eavis, Neil Irwin, Tara Siegel Bernard, Ron Lieber, Clifford Krauss, Ivan Penn, Matt Phillips, Peter S. Goodman, Patricia Cohen, Edmund Lee, Tiffany Hsu, Kevin McKenna, Ben Casselman, Geneva Abdul, Amie Tsang, Carlos Tejada, Alexandra Stevenson, Su-Hyun Lee and Heather Murphy.

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San Antonio man loses job, starts new family business

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SAN ANTONIO – Sunday marked day one for the Cabrales family’s new chapter — a shaved ice business to fight back against the impact of COVID-19.

Days after the shutdown began in mid-March due to the growing concerns surrounding the pandemic, Ismael Cabrales said he received a call from his supervisor.

“He said, ‘Hey, your name came up, and you and several others, today is going to be the last day that you guys are (employed) with us,” Ismael said.

Ismael said he had kept the same job for nine years. Although filled with uncertainty, Cabrales accepted his fate.

“In a way, it’s a sigh of relief,” Ismael said.

The company’s decision allowed him to spend more time with his wife Joana and their five children and to think about their future, Ismael said.

Related: A guide to unemployment benefits for Texans laid off during coronavirus pandemic

“My mind started wondering what our next step (would be),” Ismael said. “Necessity drives creativity (and) if your back is against the wall, you have to be creative with what you do. So, we just started dreaming and this came up.”

Until the Cabrela’s find a permanent spot to work from, they’ll announce pop-up locations and hours on their Instagram.
Until the Cabrela’s find a permanent spot to work from, they’ll announce pop-up locations and hours on their Instagram. (Cristian Ortiz-Salas)

Joanna and Ismael said after some brainstorming that they had the resources to venture into the food business and create Lina’s Treats and Cafe, a small traveling food truck that serves shaved ice.

“I don’t think you’ll find anything like us. We want to be different. Most of the products that we sell are natural. We want to stay biodegradable. We want to stay environmentally friendly,” Ismael said.

Sunday afternoon at the parking lot of Broadway Loft near The Pearl, marked the business’ first day open to the public, just in time to help keep locals cool in triple-digit heat.

Their menu offers a variety of options including sweet flavors like Berry Fun or The Hawaiian with pineapple and coconut, refreshing flavors like El Mojito with mint and lime and bold options like Cold Brew that features a locally roasted coffee from Solid State Coffee Co topped with vanilla ice cream.

The couple's children help make the strawberry drizzle that tops the Berry Fun shaved ice option.
The couple’s children help make the strawberry drizzle that tops the Berry Fun shaved ice option. (Ismael Cabrales)

Joana said the family jumped in to help with the new venture.

“I have four daughters and one son,” Joana said. “When they heard that we were going to start this business, they were all in just because they like helping in the kitchen. So, like the strawberry drizzle that we use, they actually help me cook it. They’ll cut up the strawberries and actually cook it and make the drizzle.”

Customers can also find frozen-favorites like mangonadas or fresadas, a delicious mango or strawberry-flavored shaved ice as well as traditional paletas.

RELATED: Only in San Antonio: Mangonada with hot cheetos, pickles & chamoy

The Cabrales family is eager for the San Antonio community to try their cool treats. Each purchase, they said, helps support their dreams as well as their goal to keep their family afloat during the pandemic.

The family hopes to find a permanent spot near downtown to work from on weekends. Businesses interested in renting out an area for the food truck can contact the family at linastreatsandcafe@gmail.com.

For Lina’s Treats and Cafe’s hours and current location, click here.

Copyright 2020 by KSAT – All rights reserved.



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Shaq joins coronavirus-driven koi pond trend

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A team of experts recently installed a huge koi pond at the Atlanta home of Basketball Hall of Famer Shaquille O’Neal.

The Shaq-sized water feature includes an 80-foot stream, six waterfalls, 180 tons of stone and a 22-by-50-foot pond with a sandy beach entry and a fire pit on one side, according to Greg Wittstock, the owner and CEO of Aquascape who’s also known as “The Pond Guy.”

“It’s a Ferrari of ponds,” he said.

The pond was built between the 8,600-square-foot home and a large treehouse that was installed for an episode of Animal Planet’s “Treehouse Masters” about two years ago. Wittstock showed off the finished product in a YouTube video.

SHAQ ADVERTISES $2.5M CALIFORNIA HOME ON INSTAGRAM

“It’s awesome, brother,” Shaq says in Wittstock’s video. “You did a wonderful job.”

Shaq isn’t the only homeowner with a new koi pond. Wittstock said Aquascape, his Illinois-based business, has had a tremendous surge in business as the coronavirus pandemic has kept people at home.

“We cannot keep up,” he said. “We’re working 12-hour shifts six days a week, and I’ve got everybody and their kids working for me.”

Shaq’s new koi pond includes lighting for nighttime viewing. (Aquascape)

HOMEOWNERS SHARPEN THEIR SHORT GAME WITH BACKYARD PUTTING GREENS

Others in the koi business said they’ve also had an uptick interest. Mike Rice, the president of Mt. Parnell Fisheries in Mercersburg, Pennsylvania, told FOX Business the coronavirus had reversed a downward trend.

“I feel that the hobby … was beginning to decline domestically prior to the COVID pandemic, but with more people getting into DIY projects there has definitely been an uptick this past spring/summer,” Rice wrote in an email.

Even Google search data show that there were more searches for “koi” in May and June than any other time in the past five years.

TINY HOME, BACKYARD COTTAGE DEMAND SURGES AMID CORONAVIRUS PANDEMIC

Wittstock said he believed people have been looking to create “an escape” at home to help counter the stresses the pandemic has caused.

“I think they just want the peace and tranquility and serenity that a water feature provides,” he said.

It’s a drastic turn compared to the last major economic downturn. The 2008 financial crisis saw a dramatic drop in business. This time, “We had one week in March whenever everybody was in limbo and then it was an explosion,” Wittstock said.

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Most of Aquascape’s business is not large projects like the water feature for Shaq, although Wittstock, who was also the star of the Nat Geo Wild reality series “Pond Stars,” said they do about one large-scale project each year, often for a celebrity client.

Aquascape sells all the pumps, filters, fish and plant care items and other goods one would need for a backyard water feature. A more typical setup for a new client would be an 11-by-16 ecosystem pond, an 8-10-foot stream and a 2-foot waterfall, all with filtration, pumps, plumbing, liner and stonework. A project of that scope would often run somewhere between $10,000 and $12,000, Wittstock said.

The interest since April has been “unbelievable,” he said.

“I can’t even begin to tell you,” he said. “It is insane.”

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Mask sale Uptown to raise funds for businesses | COVID-19

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When a former Uptown business owner saw people’s reactions to Greenwood passing a city ordinance requiring customers and employees at local businesses to wear protective masks, she wanted to do what she could to support business owners.

Nicole Munnerlyn, who owned Sweet Teas Children’s Boutique in Uptown for eight years, said she was surprised by negative comments she saw from people responding to the new ordinance.

“People were saying ‘I just won’t shop Uptown, then,’” she said. “Well, it’s not the city business owners that should be punished or hurt by a city mask ordinance that’s really there to protect people in the first place.”

The family business, Munnerlyn and Co., makes personal protective equipment, including masks and face shields. Munnerlyn said she’s planning to set up a tent from 10 a.m. to 4 p.m. Tuesday in front of Sweet Teas to sell protective equipment, but also to inform the public about masks. For every box sold, 10% of her sales will go to Uptown as a donation to help buy masks for Uptown businesses to use or give to customers.

“After everything that transpired, I just wanted to see what I could do to support our local businesses,” she said. “In addition to being out there, I’d like to educate people too about what needs to be used and what times and places different masks are beneficial.”

She wants to share what research she’s done into masks in order to ensure the ones Munnerlyn and Co. produce are up to FDA standards. The company sells the three-ply masks that are similar to surgical masks, along with KN95 masks that meet the FDA’s 95% filtration requirement.

She wants to show off different ways to test masks, such as by wearing it tautly and then trying to blow air through the fabric. She said if you can blow air through the fabric of the mask, it’s likely not offering much protection.

Before setting up her booth Tuesday, Munnerlyn said she’ll spend much of Monday meeting with Uptown business owners to find out other ways she can help.

Uptown Manager Lara Hudson said the funds raised Tuesday will go to helping businesses buy the protective equipment they need. She said Munnerlyn’s offer was greatly appreciated.

“So many of those businesses are already struggling with the loss of revenues, and they’re going to need to purchase masks,” she said. “Our main goal has been just to help them in any way we can.”

Hudson said even if Greenwood’s business owners might have differing opinions regarding COVID-19 protections, Uptown’s businesses always help one another out.

Contact staff writer Damian Dominguez at 864-634-7548 or follow on Twitter @IJDDOMINGUEZ.

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