Fitch cuts Italy's gov't debt grade, auto plants reopening

The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Wednesday related to the global economy, the work place and the spread of the virus.

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CENTRAL GOVERNMENTS & BANKS: Countries are slowly trying to reopen their economies in phases, as infections wane in some locations and calls for getting back to

— Ratings agency Fitch cut Italy’s government debt grade, the first downgrade to a major economy to reflect the surge in public debt that is expected to hit countries dealing with the vast costs of the coronavirus lockdown.

The agency lowered Italy’s rating by 1 notch to BBB- from BBB, just one level above junk bond status. It expects the outbreak to shrink the Italian economy by 8% this year and that there is a risk of a deeper downturn.

— The United Nations’ main labor body is again raising its prediction of job losses due to the pandemic, estimating the equivalent of 305 million full-time jobs could be lost in the second quarter.

The International Labor Organization says the expansion of longer-lasting lockdown measures has underpinned the increase from its previous estimate for the equivalent of 195 million full-time job losses — based on an average 48-hour workweek — in the current quarter.

— Indian businesses are urging Prime Minister Narendra Modi’s government to loosen a five-week-old lockdown.

Gurcharan Das, former head of Proctor and Gamble in India, said Wednesday that key infrastructure, information technology, automobiles and pharma industries which employ millions of people can resume manufacturing at half or even one-third of their capacities in large area unaffected by coronavirus infections.

If India is unable to bring the economy back on track, it could lose 30-40 million jobs by year end and the pandemic will snowball into a devastating economic crisis, Kiran Mazumdar Shaw, executive chairperson of biopharmaceutical company Biocon, said.

— Officials in Thailand’s capital city of Bangkok are preparing to ease restrictions that were imposed to fight the spread of COVID-19.

The city’s plans call for the reopening of restaurants, markets, exercise venues, parks, hairdressers and barbers, clinics and nursing homes, animal hospitals and pet salons, golf courses and driving ranges.

— Poland is going to start lifting some of its restrictions. The country plans to open shopping malls, hotels, libraries and museums n Monday. Restaurants will remain closed.

AIRLINES: The airline industry continues to struggle to stay afloat, with travel demand all but gone and thousands of

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— Finnair is launching a 500 million euros ($542 million) rights offering to strengthen its balance sheet after reporting deepening first quarter losses due to the coronavirus.

CEO Topi Manner said Wednesday that the cash position of Finnair, majority owned by the Finnish government, remained strong with liquid cash funds standing at 833 million euros ($904 million) at the end of March.

He said Finnair said expects to lose about 2 million euros ($2.2 million) a day throughout the second quarter because of COVID-19. The virus has led the airline to halt 90% of its flights and temporarily lay off the majority of its staff.

Manner said Finnair expects global commercial aviation to recover “slowly from July onwards, and passenger numbers to return to 2019 levels in two to three years”.

— Scandinavian Airlines is looking to reduce its workforce by up to 5,000 full-time positions — or half its workforce — mainly in its home region of Scandinavia.

The carrier said the potential reduction will be split, with approximately 1,900 full-time positions in Sweden, 1,300 in Norway and 1,700 in Denmark.

AUTOMOBILES: Automobile makers are beginning to see a return of employees to some of their factories but cash concerns remain.

— French auto workers are returning to factory floors at Toyota and Renault.

Renault restarted assembly lines Tuesday for its Zoe electric cars at a plant in Flins, though only a quarter of staff is allowed in so far. The company – which is negotiating with the French government for billions of euros in potential bailout funds – has resumed some activity at plants in China, Spain, Portugal, Russia and Romania, but work remains halted in India, Latin America and most facilities in France.

Toyota workers came back to work this week at a plant in Onnaing that used to churn out more than 1,000 Yaris cars a day.

MARKETS: This is the busiest week of the earnings season, with companies facing a lot of uncertainty as they deal with the pandemic.

— Global stocks mostly