Deere temporarily closes facilities in China due to coronavirus

(Reuters) – Deere & Co said on Friday it has temporarily closed its facilities in China because of the coronavirus outbreak until the company determines it appropriate to reopen.

The Moline, Illinois-based farm equipment maker has eight facilities in the world’s second-largest economy but none are located in China’s city of Wuhan, the epicenter of the virus outbreak.

It was one of the most drastic steps taken by a U.S. company in response to the outbreak. American manufacturers have been mostly following the guidelines issued by Beijing – delaying reopening of their factories after the Lunar New Year.

Deere shares closed down 1.6% at $158.58 on Friday on the New York Stock Exchange.

The flu-like virus has resulted in 213 deaths in China and more than 130 cases have been reported in at least 25 other countries and regions. Wuhan, where it originated, and the surrounding region are in virtual quarantine.

The World Health Organization has declared the outbreak a global emergency. The United States has decided to halt entry to the country of foreign nationals who had been to China within the 14-day incubation period, a day after issuing a “do not travel” advisory for the country..

Deere said it also has decided to restrict travel by its employees to and from China until a later time. Many of its employees in China will work remotely, it added.

The epidemic has cast a shadow on broader economic activity, hammering global equity markets, which on Friday posted their biggest weekly and monthly loss since August. Mounting worries about the economic impact of the virus are also driving down oil prices.

Caterpillar Inc , Deere’s rival, said earlier it was monitoring the situation in China closely and travel to and from the country is “business critical only.”

While none of the heavy equipment maker’s manufacturing facilities is in the worst-affected province, the outbreak has delayed the reopening of many of its facilities after the Lunar New Year by a week.

General Motors Co, the No. 1 U.S. automaker, also has placed a temporary restriction on travel to Wuhan, where the company has a manufacturing base as part of a joint venture with China’s SAIC Motor.

Several companies, including Tesla Inc, Apple Inc and Starbucks Corp have warned of a possible impact from the outbreak.

Reporting by Rajesh Kumar Singh; Editing by Chris Reese, Diane Craft and Jonathan Oatis

Leave a Reply