Our analysis of what the biggest global companies in Switzerland are up to. This week: multinationals' survival strategies, Novartis talks about antimalarial drug, and chocolate bunnies.
Companies are reaching deep into their own and government pockets to save themselves in the wake of the coronavirus crisis. But, how far are they willing to go and when is it too far?
The health and safety of employees is our top priority, espouse companies. The phrase has taken on new meaning in a scenario that few companies expected nor prepared for – one in which, heart-wrenching decisions are being made about who receives a test, ventilator or mask.
Sure, there are many firms that will come out of this stronger and others that will at least, emerge unscathed. Drugmakers like Novartis and ventilator manufacturers like Hamilton Medical are ramping up production. Swiss fragrance company Givaudan and chemical company Clariant are dedicating production lines to making much-needed disinfectants.
And commodity traders are hoping this proves their worth (and deflects some of the criticism) as the logistics arm for the world, bringing everything from pineapples to face masks from one continent to another.
But many more are scraping the barrel for ideas to mitigate the damage.
Global manufacturing company Georg Fischer had to partially or completely shut down various plants in Europe. In Switzerland, it introduced short-time work at most of its locations including its headquarters in Schaffhausen. Roughly 20% of the Swiss workforce is in a similar bout.
Nestlé has committed to pay hourly and salaried staff affected by temporary stoppages in full for a minimum of twelve weeks. Top executives at Swiss industrial giant ABB are taking a 10% pay cut as part of cost reduction and solidarity measures during the crisis. UBS executives announced a similar move today.
Not all moves have been as well-received though. As TagesAnzeiger reported, ABB also offered coronavirus testing to hundreds of employees, even those without symptoms, at a time when testing materials have been in short supply in Switzerland. While this may have helped protect employees, the move didn’t sit well with everyone.
The backlash against Adidas for skipping rental payments on some stores is also a cautionary tale for companies: even if something is legal it isn’t necessarily right in the eyes of the public.
This is of course only the part of the story we see here. Some of the hardest hit hardly touched six figure salaries. More are concerned that companies are cancelling orders or refusing to pay for goods already produced, in effect passing the costs of this crisis on to vulnerable workers in their supply chains. If the brand goes belly up, there may be no orders at all.
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In other news:
Some good news on the testing front as Swiss biotech firm Quotient says it will have an antibody screening test available by next week. The Financial Times reports that the MosaiQ machine has been adapted to test for coronavirus antibodies and can conduct about 3,000 tests per day at around $15-25 a pop. Experts say antibody screening that detects a person’s immunity to the virus will be critical to easing lockdowns and restarting economies. Other Swiss firms have also been making advances on serological tests.
Pharma companies are treading a fine line between hope, science and profits in the search for a coronavirus cure. Novartis is at the centre of the controversial debate over hydroxychloroquine because it is one of the biggest makers of the antimalarial drug. The Novartis CEO stuck his neck out by commenting on the drug’s potential against Covid-19, which led to many hopeful, but in some cases misleading, headlines. Hard to believe that a few months ago the company was about to sell its U.S. generics division that manufacturers the dr.ug.
In the U.S., some media reports raise questions about whether there are any ulterior motives or behind the scenes deals between pharma companies and governments propping up some drugs. But back here at the Geneva-based WHO, the discussion is focused on eliminating patent rights for treatments and vaccines to Covid-19 to prevent a “free for all” that puts poor countries last in line for life-saving drugs, says public health expert Suerie Moon in an interview.
It wouldn’t be Easter time in Switzerland without chocolate and a reminder of how far the cocoa industry still has to go to put the Easter Bunny at ease. Nestlé announced a couple weeks ago that it was excluding some 4,000 producers in West Africa from its supply chain because they were farming on protected land.
As NGO Public Eye writes, child labour remains rampant nearly twenty years after a major international agreement to eliminate it. It’s hard to fathom the impact the coronavirus crisis and its consequences will have on thousands of cocoa farmers already living on the brink.
For now, Swiss chocolatiers are trying to bring some holiday cheer to their Easter displays by slapping facemasks on their chocolate bunnies and chickens.
Thanks for reading and stay safe.
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