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Firms cautious on impact of Omicron variant

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WASHINGTON:

Pandemic-weary corporations struggled to assess the impact of the new Omicron variant of the coronavirus on Monday, with industries from airlines to automobiles awaiting more details to help determine how it might affect their operations and profits.

The World Health Organisation warned that the Omicron variant carries a very high global risk of infection surges. Spooked investors wiped roughly $2 trillion off global stocks on Friday, but markets were calmer on Monday.

Countries have swiftly imposed bans on travel from southern Africa, where the variant was first uncovered. Japan and Israel went even further, announcing bans on all foreign arrivals.

Some airlines said they were not heavily changing schedules, but industry sources said big carriers moved swiftly to protect their hubs by curbing passenger travel from southern Africa, fearing a spread of Omicron could trigger restrictions from other destinations.

Ryanair Chief Executive Michael O’Leary saw no reason to cancel flights although he was worried about some countries potentially shutting air travel. Lufthansa, Germany’s flagship airline, said its flights were still well booked.

US President Joe Biden planned to meet with chief executives of major retailers and other companies on Monday to discuss how to move goods to shelves as the US holiday shopping season begins in the shadow of Omicron.

Commerce Secretary Gina Raimondo said it was too soon to tell if Omicron will have any impact on global supply chains.

The prospect of a fast-spreading variant has raised fears of a return of the sort of restrictions that shut down a swathe of industries in 2020.

In the United States, auto plants were closed for two months last year. Even after automakers restarted operations, they have curtailed production schedules due to semiconductor chip shortages and other supply-chain constraints. Automakers said it was too soon to predict the impact of Omicron.

“This is new,” Nissan Motor’s US spokeswoman Lloryn love-Carter said. “We are monitoring of course, but we still have a lot of pretty strict Covid protocols in place.”

General Motors, the largest US automaker, said it was watching closely and its Covid-19 safety protocols remain in place at its plants.

“We continue to strongly encourage our employees to get vaccinated given the broad availability of safe and highly efficacious vaccines,” GM spokeswoman Maria Raynal said in an email. “We will continue to review and adjust our protocols as new information regarding this variant becomes available.”

Toyota Motor said its US management team will meet on Tuesday to discuss the Omicron variant and whether the Japanese automaker needs to take additional steps.

“Right now we’re in the gathering info mode,” Toyota’s US spokesman Scott Vazin said. “Since most of our employees are based in plants, we’ve never stopped Covid protocols such as social distancing, health screenings, masking up.”

Ford Motor Co, Stellantis and Volkswagen also said they continue to follow strict safety protocols for employees at all US facilities.

Published in The Express Tribune, November 30th, 2021.

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