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Coronavirus Threat in Europe Spurs Corporate Call to Arms

Coronavirus Threat in Europe Spurs Corporate Call to Arms

(Bloomberg) -- With Europe now at the center of the coronavirus pandemic, governments across the region are appealing to manufacturers to help secure life-saving equipment they will need to fight the contagion.

The U.K. government invoked the language of a wartime mobilization in an urgent bid to find more ventilators, which help people with acute cases of the illness breathe. It said it’s talking with an array of companies including Dyson Ltd., Rolls-Royce Holdings Plc and JCB. Shares of Draegerwerk AG, a German company that makes the devices, soared after it disclosed a big order from the government.

U.K. Prime Minister Boris Johnson has promised to buy as many ventilators as companies can produce, officials said, while the government is also in talks with private hospitals to buy up bed space to increase capacity.

“As a British company, we will do whatever we can to help during the unprecedented times our country is facing,” JCB said in an email Monday.

The rapid spread of the coronavirus is threatening to put significant pressure on health systems and exposing shortages of key equipment across the continent as countries brace for a potential surge in infections and deaths. The U.K. has about 5,000 ventilators and needs many more to meet the challenge, Health Secretary Matt Hancock has said.

World War II

“Our generation has never been tested like this,” Hancock wrote in the Telegraph. “Our grandparents were, during the Second World War, when our cities were bombed during the Blitz. Despite the pounding every night, the rationing, the loss of life, they pulled together in one gigantic national effort. Today our generation is facing its own test.”

Hospitals globally are trying to avoid the dire scenarios playing out in Italy, where the epidemic has outpaced bed capacity, staffing and emergency supplies. The country has the second-highest number of diagnosed cases after China, with about 25,000 known infections and more than 1,800 deaths.

As the outbreak widens, companies across a variety of industries and countries are retooling production and R&D operations, making everything from face masks to disinfectants, according to an analysis by the World Economic Forum. In one example, iPhone manufacturer Foxconn is churning out surgical face masks alongside Apple Inc. products.

Draegerwerk, based in Lubeck, Germany, said Friday it had received an order for 10,000 ventilators -- along with personal protection equipment for hospital staff -- from the German government. Delivery will stretch across the entire year and requires a “substantial” increase in production capacity. The shares rose as much as 40% in Frankfurt, even as other stocks fell.

Draeger is seeing rising demand globally for ventilators and gear including breathing tubes and filters. The demand is especially high for disposable devices, spokeswoman Melanie Kamann said by email. While the company has increased its weekly production of ventilating gear, it’s constrained by factors including a shortage of testing space, and bottlenecks could arise from the industry’s supply chain, in part because it’s getting harder to ship products.

JCB, Rolls-Royce

JCB, a construction equipment maker, said it was approached by the prime minister to help with the production of ventilators and has research and engineering teams considering the request, but it acknowledged it’s not yet clear whether it can assist. Rolls-Royce is also looking at how it could help.

“We understand that the government is exploring ways in which businesses can help deal with the outbreak of Covid-19,” the aircraft-engine maker said. “As they shape their plans, we are keen to do whatever we can to help the government and the country.”

A Dyson representative said the vacuum-cleaner maker is “working with other companies to see if we can provide a rapid solution.” A small U.K. company, Inspiration Healthcare Group, received a 1.25 million pound ($1.5 million) order from the NHS for the immediate supply of ventilators.

The effort goes well beyond ventilators.

HCA Healthcare Inc., which has six private hospitals in London and one in Manchester, said it’s in talks to explore whether it can assist as the U.K. seeks out additional beds.

Luxury conglomerate LVMH, whose perfume and skincare brands include Dior, Givenchy, and Guerlain, is switching cosmetics production facilities over to making large quantities of hydroalcoholic gel starting Monday. The gel will be delivered to French health authorities free of charge, LVMH said in a statement Sunday, prioritizing deliveries to Paris’s public hospitals.

--With assistance from Siddharth Philip, Giles Turner and Robert Williams.

To contact the reporters on this story: James Paton in London at jpaton4@bloomberg.net;Tim Loh in Munich at tloh16@bloomberg.net

To contact the editor responsible for this story: Eric Pfanner at epfanner1@bloomberg.net

©2020 Bloomberg L.P.