Just one week ago, The EI Group updated our blog recipients on the state of the emerging coronavirus. In just one week, mortality has vastly exceeded the SARS virus (349 versus 560 coronavirus fatalities).

Reported cases of the coronavirus have eclipsed 28,000, nearly a seven-fold increase in only one week! In contrast, the entire SARS outbreak resulted in only 5,327 infected.

Given the reported number of recoveries from the coronavirus in China, there is cautious optimism that the mortality rate may not be as high as SARS (9.6% with those infected by SARS died, versus only 2% deaths reported so far with the coronavirus). However, even at 1/5 the mortality rate of SARS, the actual number of deaths related to the coronavirus will dwarf the number of SARS fatalities, given the current geometric increase of documented coronavirus cases. Also, unlike the emergence of the SARS pneumonia-like virus in China nearly 20 years ago, China’s economy has expanded to $14 trillion annually, or nearly eight times their size since the SARS epidemic in the early 2000s. This phenomenal growth has propelled China into the second largest economy in the world, significantly elevating the potential impact of the coronavirus upon the global economy. Chinese investors sent shares in China down a whopping 9% on Monday, resulting in the plunge of other world stock markets. This unprecedented slide of Chinese stocks forced the Chinese government to inject $22 billion into their market to stabilize their economy.

Photo taken from a Kyodo News helicopter on Feb. 4, 2020, shows luxury cruise ship Diamond Princess off Daikoku Pier in Yokohama near Tokyo. The previous day, an elderly passenger who disembarked in Hong Kong late January was found infected with a new coronavirus, leading health officials to quarantine all the 3,700 passengers and crew members.
(Photo by Kyodo News via Getty Images)

The US economy is also beginning to experience the huge coronavirus ripple effects due to our reliance on domestic businesses that depend on China components, which are integral to the manufacture of our final products. Over 20% of US manufacturing components are made in China. These products include consumer electronics (of which 50% are made in China), automobiles and automobile parts (Hyundai, the world’s fifth largest automobile producer, suspended automobile production in South Korea), appliances, oil field pumps/valves, medical equipment, semiconductor (following comments from Qualcomm, the world’s largest chip manufacturer, that “the spread of the coronavirus may significantly impact the phone industry,” their stock fell a significant 4% yesterday!) and pharmaceutical, just to name a few.

Sales of US products to China are also a major concern. Some examples: in 2019, GM sold more automobiles to China than in the US; Apple assembles the majority of its products in China (with nearly 20% of their retail sale also there); Walmart buys vast volumes of retail products from Chinese manufacturers; and China is the largest manufacturer of toys worldwide. Airline cutbacks will result in less room for industrial shipments in the cargo belly of commercial airlines. Air travel from the US to China has slowed significantly, with major airlines cancelling flights due to demand. Major Chinese shipping ports are also experiencing significant reductions in port calls as manufacturing output in China declines.

Tourism via ocean cruise liners to and from Asia has ground to a halt. This morning, 20 new corona virus cases were identified on the Diamond Princess cruise ship off the coast of Japan. 400 of the 1000+ passengers on the ship are Americans. The ocean liner has been quarantined and no passengers have been allowed to leave their cabins for the past two days. On Sunday, the Trump administration ordered that any US citizen who visited the Hubei Province (whose capital city is Wuhan) be quarantined for up to two weeks.

Given the rapidly developing situation surrounding the spread of the pathogen, there is little doubt that the full potential of the disruption of global supply chains, as a result of the coronavirus, has yet to be seen. Torson Slok, Chief Economist for Deutsche Bank Securities, whose baseline model for predicting the ripple effect on the US economy relies on over 200 equations, admitted “economic forecasting is ill equipped to determine the impact of such an unpredictable health emergency.”

Get Prepared Now! Does your Business Continuity Plan Address a Coronavirus Pandemic?

Given the rapid expansion of the coronavirus epidemic over the past week and its potential impact to domestic business operations, there is little doubt that this pathogen will have significant pandemic repercussions. Although confirmed cases in the US are still limited to 11 (up from 4 last week), US companies need to immediately integrate coronavirus infection control into their Business Continuity Plans, to provide a template for measures associated with the spread of the pathogen. If you haven’t integrated this new business risk into your planning process, it is time to do so. Even if you did fold pandemic planning into the umbrella of your Business Continuity Planning in the H1N1 days, it seems like a good time to get it out, dust it off, and make sure it is current.

Some key elements to think about as you re-examine your Business Contingency Plan include:

1) Communicate to your customers, shareholders and employees that your company has a robust contingency plan in place to insulate or minimize disruption to operations during the coronavirus crisis.

2) Prepare a FAQ document on your updated Contingency Plan and anticipated responses for supervisors and others who may be involved in internal and external communications associated with the impact of the coronavirus.

3) Identify at risk operations, suppliers and personnel who are most likely to be impacted by the coronavirus. Primary targets are obviously operations/suppliers located in China’s mainland, personnel who have recently traveled to China, employees involved in transporting products from Chinese suppliers to domestic operations, especially those sent from China’s Hubei Province, to major domestic ocean ports.

4) Update Occupational Health Policies and Procedures as They Relate to the Coronavirus

  • Revise Employee Illness Surveillance, Management and Response.
  • Update Bloodborne Pathogens preparedness and clean up and decontamination procedures .
  • Emphasize on hand hygiene and other infection control techniques.
  • Encourage/provide seasonal flu vaccinations to reduce the possibility of flu-like illness Review stockpiles of hand sanitizers, PPE and decontamination supplies.
  • Make certain non-contact thermometers are available for rapid screening of employees.

5) Update Travel Policies – Issue a travel advisory and advice document for international and domestic travelers. Develop a travel kit of protective supplies for employees. Establish an International repatriation service contract for international travelers.

6) Identify critical operation functions and prioritize them. Develop contingencies for their operation.

7) Identify locations of critical operations and alternative work arrangements/locations for these operations.

8) Staffing contingencies – Identify alternate employees that need to be contacted in the event the coronavirus renders critical personnel unable to perform their duties. Include Human Resources and/or Labor Relations, if applicable.

9) Identify employees critical to business continuity who can work effectively from home or other selected locations

10) Define technology disruption contingencies by identifying manual or alternative processes in the event of an applications, human resource or equipment failure.

Although these elements for preparing for a pandemic seem logical to minimize the impact of the coronavirus spread on you business operations, communication of these contingency measures to employees, suppliers, stockholders and consumers is imperative in the early stages as the pathogen moves from a Chinese epidemic to a global pandemic. 

If you have any concerns regarding the Wuhan Coronavirus, business contingency plans or general workforce health concerns, please contact our Occupational Health team at 800.717.3472.