The Month Coronavirus Unraveled American Business | A WSJ Documentary

(upbeat music) - Davos was the setting. Everyone was there. You have CEOs of some of the biggest companies in the world, heads of state, the president was there. I don't remember anyone taking the

coronavirus

seriously. In Davos everyone is always excited. Nobody makes friends there by predicting pessimism. - This seems to be the decade of shared success. - Together we can. Together we will do it. - I hesitated to say anything because being a scientist, driven by facts and data, the absence of facts and data, I didn't want to make any guesses. So, in retrospect, I remember that I probably made statements that were perhaps too neutral.

I think all the right things are happening. I mean, you've seen some of the actions that the Chinese government has taken. I know that critical disease control agencies around the world are becoming very active. So we all have to wait and see there is a lot we don't know. I don't think I was pushing it by saying that the economic trajectory of the US economy would continue in 2020. People are relatively confident that global growth will continue through 2020. The possibility of an economic slowdown barring some sort of exogenous event. We had an exogenous event. I guess I was right about that. - I remember seeing the CEO of Goldman Sachs in the DJ booth at a Salesforce party, like 10 deep, shoulder to shoulder.

Now everything seems like a totally different planet. These are people who should have had the best view in the world about what was happening. These companies that have operations in China, where this virus had been circulating for weeks. And in hindsight, I probably should have reported how we approached things here because we were, like, two

month

s behind them. There was a sense that the economy was too strong and the United States was too resilient. Although some parts of the economy are showing positive signs, what happened during the

month

of March will fundamentally reshape American

business

es for the next decade.

March started on a very high note and ended with the economy in ruins. And those 31 days where everything changed. (orchestral music) - The

coronavirus

- - It is spreading through Asia and Europe. - There may be additional cases that we have identified. I want to be imperative in that. - Shares have fallen sharply again today. Economic fears and many unknowns worry investors. - All non-essential

business

es must close their physical workplaces. - Police were called after some customers started fighting over toilet paper and water. - This is our new reality right now. It's absolutely amazing where we are. (incomprehensible) - How did you get that? - Happy to do it.

Happy to do it. I want to be able to see it again for the sake of posterity. We are very good at opening hotels, but if you asked me in the 36 or seven years that I have been doing this, how many hotels have I presided over during the closure? It would be a very, very short list. - I am currently sitting in the Baccarat room at the Bellagio. This building is empty. It's a bit surreal. It's very different. - This is our operating table. So for our agricultural products, you can see that it is empty. It's usually very busy.

It is very noisy. - We designed this headquarters campus in which I have capacity for about 5,000 people. Right now, there are about 300 people on a good day. - I started sending a Friday note to employees on Friday the 13th, which was most people's last day in the office. I said that Friday, March 13, I will stop comparing this week with last week. We are in unknown territory. First, take care of yourselves and your families while we run our business. Follow local and company instructions. Use judgment and humanity with individual situations. Show leadership with concerned people. And remember, we have a business to run. - I'm Chris Nassetta, CEO of Hilton. - I am the senior vice president of corporate affairs at 3M. - I am the head of manufacturing at Toyota Motor North America. - I am the CEO of Novartis. - I am the president and chief operating officer of JetBlue. - CEO and president of Procter and Gamble. - Executive Director of Corporación IMAX. - I am president and CEO of Cargill.

We are in the privileged position of producing food. - President and CEO of Goldman Sachs. - Acting CEO and President of MGM Resorts International. - CEO of US Wealth Management for JP Morgan. - Deputy commissioner and director of operations of the NBA. - So, as we enter 2020, the United States is in year 11 of the longest economic expansion since World War II. Millions of jobs have been added to the economy. The stock market continues to reach record levels. It looked like 2020 was going to be another good year. - Three, two, one. -The new year entering 2020 felt like any other new year.

We were seven months into our fiscal year and things were going well. - I had been in my job as CEO for the first time for two weeks. - We had a box office record of more than a billion dollars. - You know, when we look back, we see a car market that was actually quite high. - Our sales increased by 6%, our profits increased by 18%. - We were eager to present a new type of aircraft. Now the Airbus 220. - How we would evolve the presentation of our game digitally. - We were all having a similar conversation about how, my God, times are good, but there's some kind of unsettling feeling like something is out there. - The pandemic showed that the strong economy was weak, it was a veneer of contraction in the sense that companies were profitable, made a lot of money and unemployment was low.

But it actually exposed these weaknesses where wages hadn't really moved. People are generally no richer than they were 10 years ago. - The jobs that we saw grow the most tended to be alternative. There is contingent work, part-time work, freelance work, commissioned work. And that also brought with it a certain moment of fragility. - Companies have spent trillions of dollars over the last decade buying back their own shares and paying dividends. - Profits were growing. But you may have been concerned, for example, about the pace at which companies are not reinvesting in their businesses or the economy.

The classic case of a lot of short-term orientation without big investments in the future. - The modern economy is technology-driven and just-in-time, perfectly efficient. And in some ways it is, and in some ways it has been very good for consumers in particular, but the flip side of efficiency is resilience. If there is no built-in grease, there is no protection for when things go bad. - A mysterious respiratory illness has health workers on alert. At least 45 people have come into contact with the virus believed to be linked to animals at a market in central China. P&G has people all over China.

We don't have plants in Wu Han, we have a distribution center. As soon as this happened, our first concern was making sure we took care of our employees. - We knew there was some kind of viral problem emerging in December. Our health and safety team had warned in Wu Han because we have five hotels in Wu Han, something is happening. - We thought it was a fair question from China because much of what we manufacture is for domestic consumption. And certainly the impacts that we looked at, the implications that we looked at were largely limited to China and perhaps parts of Southeast Asia at the time. - I don't think anyone thought, even when this was affecting Macau in China, that it would distance itself, be so close to us here and end in our permanent closure. - So there is a disconnect between the bad rumors that exist and the bad headlines that come out of China and throughout Europe and the United States.

It just keeps going up. I mean, hit one record after another. In February, looking back, it looks like arrogance, but investors often don't see what's in front of them. - Coronavirus was on the horizon, but our investor day was one of the most daring and exciting we've ever had. - I remember talking to a very, very prominent investor over Superbowl weekend in Miami, where we had a conversation with both of us and he said, "Wow, it looks like there's a lot more risk" of this virus becoming a bigger problem "than market prices." - On February 11, we were asked to participate in the NASDAQ opening ceremony to celebrate our 20th anniversary. - Happy 20th to JBLU. - I had the pleasure of appearing on Squawk Box in the morning and was asked specifically if we were seeing any impact from the coronavirus. - Do you want to start with the coronavirus? - Sure. - Is it really impacting things here in the United States right now? - For JetBlue, it is not impacting JetBlue in any significant way.

Boy, was I wrong? And there is a headline that I think he will live with me until he retires me from this industry. - The Chinese government basically shut down the country and quarantined the entire population. (tense music) That had an immediate impact on Toyota's operations there. We couldn't make cars, we couldn't sell cars. - Now we have more than 700 screens, which is 1% of the screens in the country. And Chinese New Year is the biggest movie week of the year for us in China. We normally do 10% of our year in one week. And then we heard that all the movie theaters in China were closed.

And then a day later, they said none of the big Chinese movies would be released. What was the biggest part of our year was reduced to nothing overnight. - We produce around 70 billion doses of medicines per year in more than 150 countries. We had to make the decision to send home all of our operations in China, which is more than 10,000 people. I think I started to wonder now, this is a really big thing. - Movements were restricted in China, especially in the province of Úbed. So we had to inform our employees and, more generally, communicate that this could have a ripple effect on other supply chains.

And at the time it wasn't clear how significant it would be. - We started having meetings almost every other day to really understand how to put together the right teams, assessing demand and supply chain challenges. We worked together on everything from sourcing, making sure we had the critical raw materials available so we could make ventilators, preparing the equipment so we could operate 24/7 around the world. - At the end of February we had mobilized a crisis management team. I met regularly with my CFO and thought carefully about liquidity. We were modeling every weekend, looking at these numbers that I think look horrible, that were like nothing I've ever seen before only to be surpassed by the numbers I saw the next weekend, which were only surpassed by the numbers.

I saw the next one. week, as he went deeper and deeper into the abyss. (soft music) - I remember the management team meeting I had with my team on March 4, where we all sat together in the same conference room. Jamie came and talked to us for an hour and said, "You should go read the story of the Spanish flu pandemic in 1918." It was a wildfire early in the spring and summer of that year. And then in the fall came back and killed 50 million people. And he said, this is going to be serious: 35 deaths are linked to the living care facility in Kirkland, which is the hardest hit facility.

I saw pictures of that nursing home on the outskirts. from Seattle, where families couldn't see their relatives inside the nursing home because the virus had essentially taken over that facility, the heartbreaking images of people with their noses pressed against the window trying to communicate with their loved ones, that caught my attention. attention. Airlines are where we first started to see the disruption from the virus. As we moved into March, we started to see a pretty rapid decline in customer bookings, an increase in customer no-show rates and. in the overall change in customer sentiment. We knew we were in for something very different than what we had experienced before.

Very different from SARS, very different from Zika and, frankly, very different from 9 11. - Our occupancies so quickly from the third week of February to the first week of March were almost cut in half in some of our luxury brands. But it was really where our group's business was, because of the international visits that were impacted. - That time was a hectic time. In early March, the government began imposing restrictions on large gatherings. That's when we started, in early March, to really think about the possibility that we might have to play games without fans. - I sat down with my CFO and said, "If the world shuts down, what will our finances be like? "What is our burn rate? "How do we stop spending money?" We called all our managers and said, "Write off all costs." We just said, stop it right now because you don'tWe know what the future holds. - We removed all our liquidity levers from the beginning because the reality is that cash is king.

I don't know how deep it goes. And to protect the business, I have to make sure we have enough cash. We have a line of credit of 750 billion. We took it out. (crowd applauding) - I think this event for us and the understanding of probably where we were going came the weekend of March 8, 9 and 10. We were lucky, we got 15,000 people for a UFC fight. We had Bruno Mars at the park theater, but the reality was over at Mirage, we were hosting a women's leadership conference. One of the guest speakers was sick and contracted COVID-19. A guest speaker at a large event, with about eight to 900 women, was at VIP receptions, visited several restaurants, attended several shows, met many people, and shook hands with many of our employees.

It became a little daunting to think about how we are going to handle this in the future. - When investors finally pull their heads out of the sand, they do so very quickly and the market begins to sink rapidly. Then, on March 9, the market barely opens. - Trade has stopped. Trade has stopped. - Stock falls so fast that it activates what we call a circuit breaker, which is basically a timeout. It was launched after the 1987 crisis. And it is basically an automatic stop. Everyone go back to your corner, think about what you have done. Take a deep breath and we'll try this again in 15 minutes.

And it hadn't been marketed in 20 years. It was a sign that people were panicking. Investors were running for the exits and couldn't get out fast enough. March 11 for many people is the day this became real, very real, very quickly. - We have the evaluation format that COVID-19 can be characterized as a pandemic. - To prevent new cases from entering our shores, we will suspend all travel from Europe to the United States for the next 30 days. - On March 11 we had a board of directors meeting. And the topic of that board meeting was how we were going to deal with the coronavirus.

It was understood that yes, we might have to play some games without fans. And at that moment it seemed unthinkable. And then, of course, that night was when we had our first confirmed positive with Rudy Gobert and we knew at that moment that we had to suspend the season. - Tonight's game has been postponed. You are all safe and take your time leaving the arena tonight and do so in an orderly manner. - What made people realize that was that they saw it happening in real time. There are still games happening. - This is crazy. This can not be true.

I mean it's not within the realm of possibility, it just seems more like something out of a movie than reality. -And then, very quickly, people look back at a press conference that Rudy Gobert had given, where he was joking about the whole thing and hitting all these microphones. Just start to understand that this is not a joke. - I remember thinking, I wonder what they are going to talk about on ESPN. It's a sports network and sports are closing. And then we think we sell food, whether it's ground beef or sweeteners that are used in the soft drinks that are served in these stadiums.

What will this mean for our customers? And you quickly start thinking about the second- and third-order consequences as stadiums, restaurants and public gathering places begin to close. What does that mean for our clients for their business? What does it mean for our business and what does it mean for our employees? - And March 12 was the last day I was in the office. March 12 was also the day the market suffered a serious decline. And for our 5000 advisors, the average age of an advisor in the industry is around 50 years old and they've seen a lot of these cycles and a lot of people remember 08 and 09.

But we also have several advisors who were in their 30s and I don't remember 08 and 09 and that was probably the worst day of his career and they hadn't seen volatility like that. We also have several clients who have probably never seen volatility like that. First time investors. - I was surprised how hard IMAX stock was hit because we were incredibly crushed. Our stock had been trading generally in the $20 range and dropped to six or seven dollars in a matter of days. When I was allowed, I went into the market and bought some shares, but I thought it would also send a message to our shareholders that I believed in the company and that we could survive this. - Highlights March 12th and so far I was on a flight to Boston visiting our crew members on a previously planned trip.

The questions being asked changed almost overnight. The questions our crew members started asking us were not just about my health, but will I have a job? What is this going to do to JetBlue? Can we survive this? It all came to a climax in that moment where you realize this is something much bigger than anyone expected. - We saw many of our advised clients move and de-risk and opt for cash or cash-like strategies in the short term, which is not surprising, particularly our clients who are nearing retirement just wanted to play it safe. Advisors were still going into branches because we were trying to stay open for our clients as long as possible.

The markets were very volatile. People wanted to meet with their advisor. - New York State on pause. - A state order for people to stay home. - We must enact an immediate stay-at-home order for the good of Illinois. - So there's a whole group of companies whose business models just don't make sense when there's a pandemic. Bars, restaurants, movie theaters, sports stadiums, casinos, anything that involves having a lot of people around just doesn't work. So these closed basically overnight. - I made a lot of phone calls and said, we should be leaders in this. Let's not wait.

We must be honest and say that the correct message is that we are genuinely concerned about the health and safety of our customers. To be fair to the people I was talking to, there were blockbusters coming out soon. They had pre-sold tickets for the theaters and this lunatic says to close them. - What happened from early to mid-March was that we were constantly adjusting to see if we could maintain production, but there was a point in that period where several jurisdictions basically said we were shutting down. Our pipes by design are quite thin. We don't carry much inventory.

That's the Toyota way. Inventory is waste. When our production stopped, it had the impact of nearly depleting the typical 90-120 day inventory we could surely have for some of our most popular models. Now it's much less than that in the ways we live day-to-day, to make sure we meet customer demand. We received one more bad news, as you know, the market went to hell. Our occupations were going down. At one point, our forecast for this Bellagio building was in the single digits. It became clear to us that we were going to have to close. In this state, we are the largest employer and largest taxpayer.

We are the economy of this community. We had made the decision on the 14th to close everything. We notified the governor on Sunday afternoon. And on Sunday night at six o'clock, he appeared here in Nevada on television and ordered the shutdown. - The most effective course of action is to order all Nevadans to stay home and non-essential businesses to close to the public for 30 days. - We are in closed mode. For us, that means about 270 million a month in expenses. It's our burn rate. - There was no choice. There was no business. There was no income, there was no demand.

Even if you had been able to reduce your workforce, you would still have to service your debt, you would still have to pay utilities and taxes and all these costs. No business is built for zero revenue. It just hasn't been done. - The Dow Jones has its worst day in history. I mean, hundreds and hundreds of billions of dollars of stock market value are evaporating. - We were observing changes in the markets. We were watching companies borrow more aggressively. And one of the things we started talking about was that there has always been a stigma associated with lending from the Federal Reserve window.

So, collectively, the CEOs of the big eight banks made a call and we said: does it make sense for us all to borrow a nominal amount to show that we are all in unison, that this is not something that should be stigmatized? . And if it becomes necessary to keep the banking system running smoothly for our customers, we are all prepared to do it. - And Hilton is the canary in the coal mine. This is an incredibly well-capitalized and surprisingly dominant global company that doesn't actually own many hotels. It simply collects royalties. It went from 120 to 50. Well, it will go to zero along with all the other hotel companies. - Bill Ackman is a well-known hedge fund investor.

He buys vixen companies and is quite vocal about his opinions on them. He is located at Hilton. And he went on CNBC and said, among other things, that stocks could go to zero. - You say Hilton is going to zero, I mean. - Because no company can survive a period of 18 months without income. -And as he talks, the market just drops and drops and drops and eventually triggers another circuit breaker. -I think he was trying to make it clear that people should take this COVID-19 thing very seriously because it could have a devastating impact. And the reality is that he was right. - We saw our revenue go from almost $20 million per day to zero and even negative almost overnight.

Several states were implementing travel quarantines. There were governors and other people who talked about flying only for a central trip. In March, our cash burn was about $15 million a day. When you start doing the math, you realize very quickly that there is an end point where, frankly, you run out of money. And the questions that we had to address for our team members were what are we doing to reduce costs? Suspending projects, freezing hiring, I'm looking for any lever we can pull to try to reduce our cash burn. It became very apparent that the number of flights we were doing was going to have to be reduced significantly.

And the operational complexity of doing that isn't just limited to changing people's shifts. We have this fleet of more than 260 aircraft. And where do you park all those planes? We needed to park them in the desert. - In March there was a record drop in retail sales in the United States. - And then there are the companies that are forced to close, but they no longer have customers. There is simply a total collapse in demand. People stopped buying. They just stopped going to the stores. - This is the biggest drop in retail sales since the government started tracking it in 1992. - There were many businesses that did not have the option to close.

They make things that people need. - World governments are asking us to stay open to make sure food can reach consumers. The food supply chain is complicated. There are many steps in the process, from the livestock farmers and poultry farmers and the feed producers who make the feed for the livestock and the farmers who care for the livestock and then to the production facilities and finally to the transportation system that brings them to the shops. - The number of coronavirus cases in the United States is growing exponentially. - Store shelves across the country are shrinking or completely empty. - People start to panic buying anything.

It's starting to feel a bit like back in the day. - Preloading their panic buying increased consumption beyond what we could produce in a given week, so inventories were reduced. That put a lot of pressure on the system for us to maximize production. What we wanted to do is get the assets we had running 24/7 and increase production by several million cases across our system. - These companies have to remain open. Your first priority is to keep your employees safe and keep the business running. - We acted quickly from the beginning to get as much PPE as we could.

Personal protective equipment to take the temperature of people entering and if anyone had any symptoms they could not re-enter. We added plastic shields between line workers. In the back of your mind, you have that optimism. Maybe we'll get through this without anyone being affected or anyone getting infected. But when you have 160,000 employees who are out and about not only in our facilities, but also in their own communities, you realize that the chances of that happening are very low. - And then there are the companies we all turn to forsolve this problem. You have companies that make masks and respirators.

You have pharmaceutical companies that are getting to work on treatments. So these are companies that not only don't have the option to close, but everyone looks at them and says: this is not just a business issue for you. This is an existential thing we need you to do. You have to do a better job than you used to do and do it under incredibly difficult circumstances. - We have some phase three clinical trials in the advanced phase of drug reuse. And then we have a huge drug discovery effort trying to see if we can find what we call a pan-coronavirus drug that requires new scientific discoveries and new clinical trials at scale.

And that's a much bigger challenge because clinical trial sites that are now focused on trying to respond to a pandemic are now being asked to launch a trial. Can patients still be enrolled in the study if health systems are closing? - Precisely today the number of cases has skyrocketed. More than 24,000 nationwide. New Jersey today becomes the sixth state to close all non-essential businesses. - The president invoked the Defense Production Act to prioritize the production of items under government contract and allocate scarce items where they are needed most. - The order authorizes the head of FEMA to acquire as many N 95 masks from the 3M company as he considers necessary. - We had significantly increased the production rate of respirators here in the US, going from about 22 million in January to over 35 million in March.

We could see that this was really coming to us pretty quickly here in the U.S. So not only are we looking at how to continue to push manufacturing our own products, but also what else can we do from other parts of the world? - So it's not long before you start hearing about bailouts. - Only the airline industry is seeking a $50 billion bailout, but these companies should get unconditional relief. - The industry as a whole came together in a remarkable way. The CEOs of all the airlines were in Washington, trying to make sure that all decision makers understood how vital and critical the airline industry is to this economy. - We were number one, we really reinforced with the administration that the employment situation was going to be terrible, that our industry was going to lose millions and millions of jobs, and we needed the federal government to help take care of those teams. - Employees are the most affected by this.

When 62,000 employees are laid off, it is significant. But I will give credit to the federal government. The Cares Act was adopted fairly quickly. - Thank you very much to all. It is a very important day. I have signed the largest economic relief package in American history and, I must say, or any other package, for that matter. - Then, on March 27, President Trump signs the $2 trillion coronavirus relief package and signs the Cares Act into law. This dwarfs any type of stimulus that was provided during the 2008 financial crisis. It therefore includes billions of dollars for airlines, hospitals, and state and local governments.

It has a large-scale small business loan program aimed at continuing to pay people who would have otherwise been laid off. This is a huge amount of government spending and is intended to put a Band-Aid on this broken economy. Part of what we've had to take a very hard look at is how do we make Cares Act payroll dollars work well for us and really be clear with our crew members about what we hope the future holds. - We have never advocated for any type of government aid for Hilton. So what we were advocating there on behalf of our owners, many of whom are enterprise-based small and medium-sized businesses, was that we needed to help create a liquidity bridge to help them get to the other side. - One of the most interesting things about monetary and fiscal policy is that it has really created liquidity and support for large companies.

Large companies, even those that are struggling, have been allowed to finance themselves very, very actively. But small businesses, and especially very small ones, are simply devastated by this crisis. - And the worst thing is that at the end of March it is clear that this is not over and that it is time to start making sandbags. - We had about 380 million dollars in cash, we analyzed our consumption rate and concluded that without mass layoffs and things like that, we would probably spend about 10 million dollars a month. So we looked at it and said, we're about two and a half years into a zero-income environment.

And that was a really important element for us, because at that time, the street and the voters were really focused on how long businesses could survive and whether they would close. And I think that was a really important message for us: that we had the money to survive. - We were lucky last year: we sold real estate worth about 8 billion dollars. With those 8 billion dollars, we sold part of the debt, but between what we left and a bond offering that we just made for 750 million, we have around 4.6 billion in capital and liquidity. So we have money to sustain us and it will guide what we do in the future. - What is really different about this pandemic is that it is global and that demand has been very high.

Quadrupling 3M's capacity or production is still not enough. Increased production, even by some of our competitors, is still not enough to meet demand. - Much attention was paid to the meat production industry because many facilities had been closing. - Union officials now say 164 of the nearly 900 workers at the Cargill meatpacking plant have tested positive for the coronavirus. - The facilities we closed in Pennsylvania came back online after 17 days and are up and running again. So I think the best thing we can do as an industry is do proper testing, still have proper PPE, but get plants up and running as quickly as possible so that store shelves can stay stocked. - There really is no way in a pandemic to keep everyone safe if people have to gather.

If they have to work in a factory or retail store, there is always a risk. - What kept us up at night was finding out if there really was a safe and healthy way to play again. There was no guarantee that you could do it 100% safely. And so this is literally a matter of life and death. And that weighs on you because you don't want to put anyone at risk. That's what makes the weight of these decisions so heavy. - We lost an Empire casino, one of our places in New York, we lost the horseman. And it was actually the first death within our family.

It just took on a different context from that point on and you started to realize the responsibility that you're not just responsible for a company, but at this point, you're responsible for lives. - And we lost our first crew member, which scared so many crew members, but also made us realize the reality of this pandemic and that it was not going away. - One of the stories that really impacted me was the first death we had at one of our production sites. I think this was a moment where it became very real that we have this difficult balance to walk.

We make these medicines that hundreds of millions of people depend on, and yet at the same time, we want to protect the people who bravely come to the office, to manufacturing sites, or to our clinical trial sites, where healthcare workers health were working valiantly to keep the hospitals running. - There is no magic formula. There is no vaccine or magic therapy. They are just behaviors. - On March 31, the last day of the month, the United States surpasses China in the official death count. The total number of confirmed cases at that time is 160,000, which is the most of any country in the world.

American companies enter March with an 11-year economic expansion. By the end of the month, the economy was in tatters, 10 million people had lost their jobs. - Unemployment figures are at unprecedented levels. - The self-service, a symbol of America's capitalist invention that is now used to process its unemployment millions. - Literally about a third of American workers were vulnerable, vulnerable to being laid off, vulnerable to furloughs, vulnerable to reduced work hours. Now, that is clearly a much higher figure than actual unemployment. - The 500 largest companies in the US are worth $3 trillion less than before the month began.

The market, which just hit all-time highs in February, is officially in bear market territory, 20% below the peak. - The pandemic closed the book with a chapter for American companies. The decade that followed was one of the most successful in history and ended quickly. That's a big blow for companies to absorb. - Given our access to information because we have such a large footprint in Asia, why do all of us (and by the way, not just all of us, but so many) feel that the possibility of this spreading into a global pandemic Was it low? We all tend to see things through the lens of the experiences we have had. - The difference is that we are now much more connected globally through air travel and the way supply chains work than we were 10 or 12 years ago when SARS and MERS were really happening.

We've seen the market hit record highs after hitting record highs since March, but there's a lot of rebuilding left to do. And companies are now grappling with the kind of foundation they are rebuilding on. - What could be the characteristics of the economy resulting from this? One is the idea of ​​what we consider essential infrastructure, essential capabilities for our company. Now we've all rediscovered that, in fact, probably the most essential infrastructure right now, like I said, digital infrastructures. In reality, I don't think we are going to see a slowdown in investments in digitalization. I think they can continue to accelerate. - One of the things we are thinking about is how do you continue to attract fans?

How can you still attract people who love your sport and can't actually be there physically? And that's why I think technology and the integration of that technology, those are the types of innovations that have emerged from this pandemic. - I think one of the capabilities that I think companies are going to have to think through and develop is how to build resilience, even if it comes at the expense of some efficiency. - Toyota's way of production, which includes just-in-time parts supply or a more rigorous focus on highly efficient manufacturing, that is not going to change. What can change within this is the way we support our partners, our suppliers, to be resilient and able to provide just-in-time parts and production. - In a place like this, in Bellagio, it normally takes around 70% to cover expenses.

Even these are big ships, so to speak. And to the extent that we're not in that mode, we're probably not making money. Our principle will be that it will be some time before we get there. And then how can we consider this operation? How can we look at this business and refocus it so that we can do it much more effectively with a much lower occupancy rate? - I think there have been other different types of changes at the level of society and economics is becoming even more evident about the disconnect that often occurs between successful corporations and the successful parts of the economy and the parts of society that they are left behind.

Those might have been abstract conversations in a sort of abstract theoretical way, but I think most business leaders have had direct personal experience with that at this point. - This will not last forever and some companies will win. Some will be stronger for having planned, been flexible, and gotten through it, and others will simply never come back. - As an investment company, we teach our clients to look at the long-term goal and I believe that is how a business is run. You run a business for the long term. You are prepared for the worst. This was the worst. (tense music)