Four giant flat-screen monitors adorn the wall inside the operations center at Global Rescue in Lebanon. Members of Global Rescue’s medical, rescue and “intel” teams work silently in front of computer screens. The calm in the room belies the urgency of their tasks.
One screen tracks the global flow of plane traffic. Another is tuned to the news channel Al Jazeera. A third shows a satellite view of Haiti and the Dominican Republic. And the fourth screen, farthest to the right, projects a map of China.
It’s sprinkled with black dots.
That’s not good: Each dot represents the location of a Global Rescue client — an individual, business, non-governmental organization or government agency — that has contracted with the Lebanon-based medical, security and evacuation services firm to provide emergency assistance in the event of catastrophe.
These days, the COVID-19 coronavirus outbreak has the firm’s attention, and it’s also impacted Upper Valley employers who have seen foreign plants and suppliers shut down and travel plans curtailed.
“We’ve had hundreds of calls since it popped,” Scott Hume, Global Rescue’s vice president of operations, said about, the sometimes-deadly new virus that began appearing in Hubei province in China a couple months ago and which as of Friday has reported cases on every continent except Antarctica.
“It’s everything from people asking for advice to how to get out,” Hume said of the calls, who adds that evacuations of U.S. citizens from China are handled through the U.S. government.
Coronavirus is touching the Upper Valley more than 7,000 miles away, a potent reminder of how local businesses are linked with counterparts on the other side of the world in a global economy.
As of Saturday, more than 85,000 people were known to be infected with COVID-19 and more than 2,900 deaths have been recorded. The disease has a mortality rate of about 2%, according to public health officials, which is significantly lower than the outbreaks of SARS and MERS but higher than during a regular flu season.
For Global Rescue, which specializes in providing aid services to people in catastrophic circumstances — whether it’s a backpacker who needs medical help in the Himalayas or aid workers in a strife-torn region — the coronavirus has meant around-the-clock staffing at its operation centers in Lebanon and in Manila, Philippines. For others, such as Lebanon manufacturers Hypertherm and Fujifilm Dimatix, and GW Plastics in Bethel and Royalton, it has meant interruption of work and factory shutdowns.
Global Rescue has been receiving an average of 250 incoming calls per day since the coronavirus outbreak was initially detected in China in December (call volume was up 18.5% in February from January, paralleling the rise of coronavirus).
“It’s had a dramatic impact on our operations over the past 60 days,” said Dan Richards, founder of Global Rescue. “This is casting a very long shadow in travel and tourism. People who might be planning a trip are thinking twice,” he said, especially as the virus spreads to more countries.
Canceled travel plans due to coronavirus are being seen firsthand at Milne Travel, the Vermont-based company that specializes in corporate travel. Chief executive Scott Milne, a Pomfret resident, frequently works out of the agency’s West Lebanon office.
He reported the firm has had $1 million worth of cancellations in the past three weeks.
“It’s not as bad as 9/11 and 2009,” Milne said about the drop in travel business following the 2001 terrorist attacks and the depth of the Great Recession. But it’s “worse than SARS and MERS,” he said, referring respectively to the 2002 respiratory virus epidemic to emerge from China and the 2012 viral respiratory illness first detected in Saudi Arabia.
Milne thinks the increased reaction to coronavirus may be due in part to the greater sweep and influence of social media since the previous outbreaks.
The cost of a round-trip business class ticket to the Far East can run about $10,000 per passenger, Milne said, “so that adds up pretty quick” as corporate clients cancel business trips.
Among the companies that have pulled back on employees traveling to China is GW Plastics, whose manufacturing plants in Vermont make injection-mold products for the medical, transportation and filtration industries. GW Plastics opened a plant in Southern China about 700 miles from Wuhan, where it makes and assembles medical device components.
Brenan Riehl, chief executive of GW Plastics, said the 200-employee plant was idled for nearly three weeks — including the normal weeklong Chinese New Year holiday — as part of the Chinese government’s countrywide order to shut down factories in most provinces to contain the virus’s spread.
“We’re not back at full production yet, maybe 60% to 70% of the way there,” Riehl said.
He said GW Plastics was actually lucky to receive the green light for its factory to resume operations earlier than many others because it makes products for the medical market.
Financially, Riehl said, he does not yet know the impact on the company, although “February will be a bit light.
“Thankfully, none of our employees that we are aware of have been infected,” he said, adding that the company “took aggressive steps to clean the plant top to bottom and everyone wears masks.”
The company shipped its own supply directly to the factory, just to make sure they were available, he said.
Lebanon’s Fujifilm Dimatix, which makes industrial print heads at its factory on Etna Road, doesn’t have a manufacturing plant in China, but the Chinese market nonetheless accounts for 30% of its sales and is where it sources 35% of its materials, said Jeff Horten, vice president of operations at the company.
Fujifilm maintains a sales and support staff of eight Chinese nationals in Shanghai, who service and troubleshoot for the company’s customers in China. But most of the scrambling Fujifilm has undertaken in response to coronavirus is back home.
Once China shut down its factories, Fujifilm had to swing to U.S. suppliers of its source materials to make up the shortfall, which it could readily do — but, not surprisingly, at a higher price.
“The cost difference is about 40%,” Horten said of the shift to U.S. suppliers. “You try to mitigate it, but you do what you have to do,” he said.
The financial impact on Fujifilm, between the interrupted sales to China and the higher cost to buy materials, will run into the “millions,” Horten said. The financial hit had some Fujifilm workers in Lebanon, where it employs about 475 people, worried that it would lead to layoffs stateside.
“I actually sent out a letter saying ‘no,’ there is no intention of making staff” cuts, said Horten.
Evan Smith, chief executive of Hypertherm, noted that he himself had just been “held up in U.S. immigration” after returning from an overseas trip because he had “transited” through China in January. He said via email that once the coronavirus became known, the first thing Hypertherm did was trigger a “pandemic response plan” to ensure safety at all its global offices.
“We basically lost two full weeks of business” in China last month “as both our logistics operation and our customers were shut down by government mandate, and we kept our own people in China working from home,” Smith said.
The maker of plasma jet torches that are used to cut steel and other hard materials began coming back online in China in the third week of February, but it will “probably take the balance of the quarter to normalize, assuming that the virus spread doesn’t escalate from here,” he said.
“We naturally have stopped travel to and from our Chinese offices, which slows down business initiative execution. And, of course, many of our customers in other parts of the world do business in China and are affected by business stoppages there, likely dampening their purchases,” he said.
While Smith said there is “no doubt” there will be an economic fallout from coronavirus, he noted that the industrial economy — and China in particular — was already experiencing a “cyclical downturn” before the crisis hit, so parsing out the financial impact is “hard to measure.”
Global stock indexes fell sharply last week as the coronavirus spread into more countries, a clear sign that investors are worried about negative consequences for the economy. Stocks posted their worst week since the financial crisis in 2008.
Publicly traded companies with a presence in the Upper Valley were not immune.
White Mountains Insurance, the insurance holding company that is often described as a mini-Berkshire Hathaway and whose executive offices are in Hanover, has seen its stock tumble more than 15% from a high of $1,168 per share in early February. Newport gunmaker Sturm, Ruger & Co., whose stock had been slowly recovering from a nadir in August, fell 11% last week to $48.04 per share.
Another major Upper Valley employer with an international presence — Dartmouth College — last week ended its Italy study abroad program early and is also not approving travel waivers through spring term to China or Hong Kong, which has been hit by civil unrest, according to Dartmouth spokeswoman Diana Lawrence.
But there could be a silver lining for people willing to travel, according to Milne. With global tourism dampened by people hesitant to board a plane and take a vacation to a foreign destination, hotels and airlines are going to try hard to motivate customers.
“We’re going to see some of the best deals we’ve seen in years,” Milne said.
John Lippman can be reached at jlippman@vnews.com.