Coronavirus In China Hurting Local Businesses In Massachusetts
BOSTON (CBS) - A major sell-off to start the week on Wall Street after investors were rattled by a rise in coronavirus cases outside China. Italy now has the largest outbreak in Europe with more than 200 cases.
Market experts say Monday's 1,000-point dip in the Dow Jones was due to concerns about how the virus will impact the global economy. Douglas Boneparth of Bone Fide Wealth said, "in the short term, this will continue to create volatility in the markets. The concern I have is around supply chain, and how fragile that may be."
Factories in China shut down, in an effort to control the spread of the virus, and that's hurting local businesses. Peter Skiera is the Vice President of Product Development at Boston-based Como Audio. He said, "we're not doing anything when they're shut down."
The company sells high-end home music systems that are manufactured entirely in China. "This can't go on for too much longer," said Skiera. "We need our factories to start up pretty soon."
If production doesn't pick back up in the next two weeks, Skiera says the company may not be able to fulfill orders, which would affect the bottom line, and could lead to some difficult conversations. "When you're a little company with six or seven employees and your business is 100% dependent on these goods from China," said Skiera, "it's scary for sure."
Another Massachusetts-based company feeling the impact of coronavirus is Eastern Acoustics Works. The Whitinsville company makes loudspeakers for large venues like stadiums and arenas.
Company president TJ Smith said the company shifted all manufacturing to China in 2016, but now with this outbreak he's "really concerned" about orders not being fulfilled.
If production in China doesn't resume, Smith said the company will only be able to fulfill orders through May, or June at the latest. The uncertainty has changed the way Smith looks at the business model, and he would, "love to shift manufacturing back closer to home," in the U.S.
As far as the steep drop in the Dow Jones, long-term investors like Douglas Boneparth say don't panic. "We don't want to take any sharp moves when we're trying to figure out what's going on here," he said.
