Shares of industrial and transportation companies fell sharply as the U.S. auto industry went into a complete standstill in a way that's never been seen before.
The Detroit car companies have agreed to temporarily shut down factories in the U.S. to protect workers against the rapidly spreading coronavirus, according to people familiar with the matter, in an unprecedented work stoppage that will affect more than 150,000 factory employees.
Executives from General Motors, Ford Motor and Fiat Chrysler Automobiles reached the decision Wednesday following discussions with union leaders, The Wall Street Journal reported.
A huge swath of U.S. workers are employed by industries ancillary to auto production that could feel the knock-on effects, from car dealerships to mechanic shops to auto suppliers.
The unprecedented shutdown of an industry that's long been at the heart of the U.S. economy takes the growth shock from the coronavirus pandemic into unchartered territory, strategists said.
"During the financial crisis, that really impacted households in two ways --depending on which industry you worked in -- layoffs -- and it was a housing value crisis," said Oliver Pursche, chief market strategist at broker-dealer Bruderman Brothers.
"Right here, it's much broader." Not even the massive stimulus plans floated by the Trump administration are likely to cushion the impact of what could amount to a freeze of all industrial and services-sector activity, strategists warned.
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(END) Dow Jones Newswires
March 18, 2020 17:00 ET (21:00 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.