# Insight

First Aid from Companies

In this time of crisis, many companies are switching to manufacturing essential products, launching initiatives, and sending their employees to places they are needed. A look at their reasons.

Seamstresses at 575 Factory in the Hungarian capital, Budapest, make face masks for everyday use. The company normally produces sportswear.Anadolu Agency/Kontributor/Getty Images

Absolute silence has reigned since March 2020 on Anfield Road, where a sea of red-and-white flags would nor­mal­ly be wav­ing and more than 54,000 peo­ple cheer­ing for Liv­er­pool FC. In March it was not clear when one of the most suc­cess­ful clubs in England’s Pre­mier League would again play soc­cer in front of spec­ta­tors. Soon after announc­ing the ces­sa­tion of play, the club’s chief exec­u­tive offi­cer, Peter Moore, offered to have its stew­ards assist local super­mar­kets in tasks such as reg­u­lat­ing the num­ber of cus­tomers or help­ing seniors with their shop­ping.

Companies take responsibility

Many indus­tri­al com­pa­nies have respond­ed to the coro­n­avirus cri­sis in sim­i­lar­ly direct and prag­mat­ic ways. Some have shift­ed parts of their pro­duc­tion to essen­tial goods; some have expand­ed their devel­op­ment capac­i­ties and are now bring­ing entire­ly new prod­ucts onto the mar­ket. Oth­ers are help­ing in order to keep their own under­uti­lized employ­ees at work dur­ing the cri­sis. Some are link­ing this assis­tance to their brand name with an eye toward sus­tain­ably enhanc­ing their image. Although the under­ly­ing moti­va­tion to pro­vide relief dur­ing the pan­dem­ic may well be a mat­ter of sol­i­dar­i­ty and social respon­si­bil­i­ty, the asso­ci­at­ed costs for many com­pa­nies are high.

Brit­ta Heer from Edel­man Deutsch­land knows how impor­tant it is for com­pa­nies to real­ize the cur­rent need to assume social respon­si­bil­i­ty. A 2020 Trust Barom­e­ter spe­cial report from the Edel­man Intel­li­gence research and ana­lyt­ics con­sul­tan­cy—Brand Trust and the Coro­n­avirus Pan­dem­ic—sur­veyed around 12,000 peo­ple world­wide. “Peo­ple are call­ing not only on gov­ern­ments to address the virus, but also on the pri­vate sec­tor and its brands,” says Heer. Eighty-nine per­cent of respon­dents world­wide expect com­pa­nies to shift their pro­duc­tion to goods that help con­sumers meet today’s chal­lenges. As Heer adds, “Com­pa­nies that do not lis­ten and respond to these needs right now are putting their rep­u­ta­tions on the line down the road.” Those that do respond are com­ing up with a wide range of poten­tial solu­tions. There are many small and large ideas that are hav­ing an effect—and often pro­vid­ing real relief and eco­nom­ic sup­port in an uncer­tain time.

From flip-flops to special footwear: The Alpargatas company has repurposed part of its production.Havaianas

Targeted use of strengths

For many com­pa­nies, the deci­sion to shift their pro­duc­tion appears nat­ur­al in retrospect—especially if the new prod­ucts fit in smooth­ly with their core busi­ness. One exam­ple is Alpar­gatas, a Brazil­ian shoe man­u­fac­tur­er. A leader on the Latin Amer­i­can footwear mar­ket, it makes the world-famous Hava­ianas flip-flop brand. Alpar­gatas donat­ed around 20,000 spe­cial­ized, wash­able shoes to pub­lic hos­pi­tals in var­i­ous Brazil­ian states. The shoes were made at Hava­ianas fac­to­ries in place of flip-flops. To ensure smooth and safe pro­duc­tion, the entire man­u­fac­tur­ing process was restruc­tured and the employ­ees received spe­cial train­ing. The com­pa­ny also pro­duced and donat­ed 1.3 mil­lion face masks and gave around 500,000 kits of essen­tial prod­ucts to vul­ner­a­ble com­mu­ni­ties in five of Brazil’s state cap­i­tals (São Paulo, Rio de Janeiro, Brasília, Sal­vador, and Belo Hor­i­zonte), and cities in Paraí­ba State.

San­i­ti­za­tion, which also destroys virus­es, is the core exper­tise of Kärcher, a Ger­man clean­ing tech­nol­o­gy com­pa­ny and glob­al mar­ket leader (2019 sales: 2.58 bil­lion euros). An inde­pen­dent lab­o­ra­to­ry test has shown that when cor­rect­ly used, the company’s steam clean­ers elim­i­nate viruses—and are there­fore an alter­na­tive to dis­in­fec­tants in home, com­mer­cial, and indus­tri­al set­tings. This fam­i­ly-owned com­pa­ny also shift­ed pro­duc­tion at one of its plants in south­ern Germany—Sulzdorf in north­ern Baden-Württemberg—from cleans­ing agents to sub­stances need­ed for hand san­i­tiz­ers.

Porsche Consulting/Jörg Eberl

We made the very deliberate decision to support smaller facilities.

Hartmut Jenner
Chairman of the Kärcher Board of Management

“We were able to draw on our employ­ees’ exten­sive exper­tise and expe­ri­ence,” says Hart­mut Jen­ner, the chair­man of the Kärcher board of man­age­ment. The com­pa­ny dis­trib­uted some of its hand san­i­tiz­er to more than fifty local emer­gency med­ical ser­vices, food banks, and care facil­i­ties. “Hand hygiene is part of any and all attempts to fight the coro­n­avirus, and is absolute­ly cru­cial for vul­ner­a­ble groups,” says Jen­ner. Most dona­tion dri­ves have focused pub­lic aware­ness on the needs of hos­pi­tals and the health­care sec­tor. “So we made the very delib­er­ate deci­sion to sup­port small­er facilities—which for us was the obvi­ous thing to do.”

Creative use of expertise

Accord­ing to a sur­vey com­mis­sioned by the Ger­man Fed­er­al Min­istry of Eco­nom­ics and con­duct­ed by the Kan­tar mar­ket research com­pa­ny, more than one-third of com­pa­nies in Ger­many have expand­ed their range of prod­ucts or ser­vices in con­nec­tion with the coro­n­avirus pan­dem­ic. This includes those that have ven­tured into entire­ly new fields. Viess­mann, a spe­cial­ist in heat­ing sys­tems from the Hes­s­ian town of Allen­dorf, shift­ed part of its pro­duc­tion to ven­ti­la­tors. With­in three days, engi­neers at this fam­i­ly-owned com­pa­ny (sales in 2019: 2.65 bil­lion euros) had con­sult­ed with physi­cians and pro­duced a pro­to­type based on com­po­nents used in gas heat­ing sys­tems. Three weeks later, the first ven­ti­la­tor rolled from a pro­duc­tion line for Viess­mann gas wall units. As of June 2020, pro­duc­tion is on hold while a spe­cial autho­riza­tion process to man­u­fac­ture med­ical equip­ment is still under­way. If anoth­er wave of infec­tions and severe cases should arise, par­tic­u­lar­ly with­out sign of respite in devel­op­ing coun­tries, Viess­mann could pro­duce up to 600 ven­ti­la­tors a day.

The Viessmann heating system specialist made ventilators during the crisis.Viessmann

The Com­pos­ite Resources com­pa­ny in the U.S. pro­vid­ed high-speed assis­tance. The par­ent com­pa­ny of the CORE Autosport rac­ing team, which usu­al­ly focus­es on pro­duc­ing pre­ci­sion parts from com­pos­ite mate­ri­als for indus­tries such as avi­a­tion, aero­space, and health­care, is now mak­ing every­day masks from a poly­ester-cot­ton blend as well as trans­par­ent vinyl visors. When founder Jon Ben­nett saw a tele­vi­sion report on nurs­es hav­ing to sew their own masks, he swung into action. “In thir­ty-six hours we had designed the pro­to­type, pro­cured the raw mate­ri­als, launched an e‑commerce web­site, and start­ed orga­niz­ing the pro­duc­tion line,” says Mor­gan Brady, the man­ag­ing part­ner at Com­pos­ite Resources. The facil­i­ties need­ed for pro­duc­tion were already avail­able, as was the exper­tise on the part of employ­ees. This meant the only costs involved were for raw mate­ri­als. Mask production—involving more than twen­ty employ­ees on two shifts—started in March 2020. “By pro­duc­ing masks we are help­ing soci­ety at large and also keep­ing our staff employed,” says Brady.

Helping one’s own target group

The Jäger­meis­ter maker of herbal liqueurs is also help­ing to com­bat the virus. Based in Wolfen­büt­tel in Lower Sax­ony, the com­pa­ny donat­ed 50,000 liters of pure ethyl alco­hol to the munic­i­pal hos­pi­tal in the neigh­bor­ing city of Braun­schweig. The hospital’s phar­ma­cy processed the alco­hol into dis­in­fec­tants. Local author­i­ties issued a tem­po­rary direc­tive to encour­age dona­tions of this type: Jäger­meis­ter did not have to pay either the usual cus­toms or tax on alco­hol. What is more, this inter­na­tion­al­ly pop­u­lar brand—around 80 per­cent of Jägermeister’s sales are out­side Germany—is active­ly help­ing com­mu­ni­ties across bor­ders as well. The glob­al ini­tia­tive #SaveTheNight is sup­port­ing artists and bar­keep­ers around the world with dona­tions and micro­fund­ing. The com­pa­ny is sup­ple­ment­ing the ini­tia­tive by gen­er­at­ing a range of new enter­tain­ment offer­ings. Jäger­meis­ter has there­by cre­at­ed a rev­enue plat­form with­in the “nightlife ecosys­tem.”

Porsche Consulting/Marco Prosch

Solidarity for us is a matter of the heart.

Christopher Ratsch
Executive Board Member, Mast-Jägermeister SE

“We take this ini­tia­tive very seri­ous­ly. There’s no red tape involved and it makes per­fect sense,” says Christo­pher Ratsch, a mem­ber of the exec­u­tive board of Mast-Jäger­meis­ter SE. The aim is to sup­port both sides of the nightlife community—those who need direct help for their liv­ing expens­es, and those who have to stay at home instead of flock­ing to clubs and bars, meet­ing friends, and hav­ing a good time togeth­er. “With the #SaveTheNight ini­tia­tive we want to give some­thing back to this very impor­tant com­mu­ni­ty. Sol­i­dar­i­ty for us is a mat­ter of the heart,” says Ratsch.

Opportunities for employees

Extra­or­di­nary sit­u­a­tions require extra­or­di­nary mea­sures. To sup­port the food indus­try in the cri­sis and to keep its staff employed dur­ing a peri­od of lim­it­ed restau­rant ser­vice, McDonald’s in Ger­many entered a part­ner­ship with the Aldi-Süd and Aldi-Nord super­mar­ket chains. McDonald’s and its near­ly 230 fran­chis­es employ more than 60,000 peo­ple at around 1,500 restau­rants. Employ­ees of the fast-food chain affect­ed by tem­po­rary restau­rant clo­sures dur­ing the pan­dem­ic could be hired on a short-term basis by Aldi and work in its sales or logis­tics. In the words of Hol­ger Beeck, the man­ag­ing direc­tor and pres­i­dent of McDonald’s Ger­many, this was a clas­sic win-win sit­u­a­tion: “Our employ­ees could keep working—if they want­ed. And Aldi ben­e­fit­ed from addi­tion­al resources.”

Facts and Figures

Trust in Brands

Companies are expected to act responsibly to address the coronavirus crisis. This is clear from the Trust Barometer Special Report: Brand Trust and the Coronavirus Pandemic (March 2020) from the Edelman Intelligence research and analytics consultancy, which is part of the Edelman global public relations firm.
  • 89 percent of respondents worldwide expect companies to shift to producing products that help people meet challenges.
  • 55 percent think that companies are responding more quickly and effectively to the pandemic than the government.
  • 90 percent want companies to partner with governments and relief agencies to address the crisis.
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