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Conglomerates Accelerate Efforts to Fight Coronavirus Menace

Avisekh Bhattacharjee

The coronavirus pandemic has been playing havoc on most world economies, with stock markets hitting an all-time low, thereby affecting shareholders’ wealth. Notably, the NYSE and the S&P 500 have recorded a decline of 28.4% and 23.8%, respectively on a year-to-date basis. Projections of the outbreak's devastating long-term impact on world economy have unnerved investors.

In response to the U.S. economy slowdown, the Senate passed a nearly $2 trillion emergency relief package to support businesses, hospitals and households. Moreover, in an effort to mitigate the outbreak’s devastating effect, the Federal Reserve has come up with some bold measures. For the first time since the 2008 financial crisis, on Mar 15, the Federal Reserve slashed interest rates to zero to provide additional support to the financial system. Notably, this was preceded by a rate cut of 50 basis points by the central bank earlier this month.

Governments across the globe are working round the clock with public health response teams to protect the lives of people by ensuring the availability of personal protective equipment.

In response to the serious situation, several industrial conglomerates have also committed to support the government in fighting the pandemic by expanding their production line, providing healthcare products and services to customers on an emergency basis and taking precautionary measures for their employees.

We are presenting some of the participants from the Zacks Conglomerates sector, which have been taking pro-active measures to mitigate this coronavirus menace.

General Electric Company GE recently decided to collaborate with Ford Motor Company F for expanding its production scale of ventilators to equip clinicians with medical equipment for the treatment of COVID-19 patients. The companies will work on producing a simplified design of GE Healthcare’s existing ventilator to address critical requirements amid the pandemic.

GE Healthcare has increased its production of medical equipment like CTs, mobile X-ray systems, ultrasound devices and patient monitors apart from expanding its production capacity of ventilators. The company also intends to double ventilator production capacity again by the end of second quarter this year. The initiatives have been taken to help better meet medical needs.

In addition, the Zacks Rank #3 (Hold) company is recruiting additional manufacturing employees and shifting current employees to cater to high demand. Also, it has been managing its supply chain by working with suppliers to minimize any shortage.

Honeywell International Inc. HON has been taking pro-active steps to expand manufacturing operations at its Smithfield, RI site for the production of N95 face masks. This Zacks Rank #3 company’s delivery of face masks to the U.S. Department of Health and Human Services will add to the U.S. stockpile of personal protective equipment.

Notably, the addition of the Smithfield mask production line will help in generating a minimum of 500 new jobs. As noted by the company, the recruitment, hiring and training of these manufacturing workers will commence straightway to address coronavirus-related issues.

Danaher Corporation’s DHR business subsidiary, Cepheid received the Emergency Use Authorization from the U.S. Food & Drug Administration for Xpert Xpress SARS-CoV-2.

Notably, Xpert Xpress SARS-CoV-2 is a rapid molecular diagnostic test for qualitative detection of SARS-CoV-2, the virus responsible for causing COVID-19. This kit will likely be shipped to U.S. facilities by Mar 30. Danaher carries a Zacks Rank #3.

3M Company MMM will collaborate with Ford Motor in the fight against the coronavirus pandemic. Notably, the company will partner Ford for expanding its powered air purifying respirators production. Both the companies will work on combining their complementary capabilities and resources to cater to the increase in global demand for personal protective equipment.

This Zacks Rank #5 (Strong Sell) company has been manufacturing 35 million respirators per month in the United States, of which over 90% are intended for the healthcare industry. Also, it has been manufacturing respirators in Europe, Latin America and Asia Pacific. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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