Mar 6, 2020

Axios Navigate

Happy Friday! If you've got tips or feedback, email me at joann.muller@axios.com.

  • Join Axios co-founder Mike Allen on March 19 in Detroit as he talks about what matters for business in 2020 with the president of the U.S. Chamber of Commerce and the CEO of Shinola, plus a small business panel led by Axios Cities correspondent Kim Hart.

Now let's catch up on a busy week: today's Smart Brevity count is 1,406 words, a 5-minute read.

1 big thing: Coronavirus fear slams airlines

Illustration: Sarah Grillo/Axios

Not since the aftermath of 9/11 has there been such a fear of flying.

Why it matters: The novel coronavirus has the airline industry bracing for the worst downturn since the Great Recession. Even though the government says it's safe to fly domestically, the drumbeat of news about COVID-19 has cautious employers stifling business travel and worried families rethinking their summer vacation plans.

Driving the news: Southwest Airlines CEO Gary Kelly said Thursday the sudden drop in domestic air travel "has a 9/11-like feel."

What's happening: Travel agents are being inundated with calls and emails from panicked clients canceling trips and seeking refunds.

Citing a collapse in travel bookings, airlines are slashing capacity and making emergency cost cuts, even offering employees unpaid furloughs.

  • More than 1,000 planes have been taken out of service worldwide amid concerns the slowdown could extend into the busy peak summer season, says the Wall Street Journal.

And the crisis comes as airlines are already reeling from the year-long grounding of Boeing's 737 MAX to fix software issues after two deadly crashes.

A global industry trade group is sounding the alarm, and even asking governments for help.

  • "In little over two months, the industry's prospects in much of the world have taken a dramatic turn for the worse," according to the International Air Transport Association.
  • "Whether we see the impact contained to a few markets and a $63 billion revenue loss, or a broader impact leading to a $113 billion loss of revenue, this is a crisis."

The public's fear of flying may be overblown, fanned by a wave of cancellations of big trade shows, conferences and events — anywhere there are large groups of people.

  • People think being strapped into an airplane next to someone who might be ill is just as risky.
  • Because of how air circulates and is filtered on airplanes, most viruses and other germs do not spread easily on airplanes, according to the Centers for Disease Control.
  • A team of public health researchers found that airline passengers in window seats are less exposed to germs while people seated on the aisles, or those who get up and move around during flights, including flight attendants, are more susceptible, National Geographic writes.

Studies by the University of North Carolina and others have found coronaviruses can survive on surfaces for days.

  • Airlines typically give a cursory cleaning to planes between flights, although many airlines say they are taking extra steps to disinfect planes amid coronavirus fears.

The bottom line: The pain is acute for airlines at the moment, but the industry bounced back vigorously after 9/11 and the 2003 SARS epidemic. People have short memories.

Read the full story.

2. Robots deployed to the front lines of outbreak

Xenex UV-emitting robot at work. Photo: Xenex

As coronavirus spreads across the globe, health care professionals are tapping germ-zapping robots and roving tele-doctors to help minimize human exposure to the virus.

Why it matters: Drones and other robots could potentially slow the spread of the illness and perhaps speed the delivery of medicines and other support where help is needed. But deploying them comes with a host of ethical questions.

What's happening: Hundreds of hospitals already use ultraviolet-emitting Xenex robots to disinfect operating rooms and kill MRSA and other pathogens. Now they're turning them on coronavirus, too.

  • Vici, a device that looks like a tablet on wheels, enabled doctors to remotely interact with the first U.S. coronavirus patient at a hospital in Everett, Washington, writes Forbes.

What to watch: Drones and unmanned aerial vehicles can perform a variety of tasks that could be beneficial in fighting epidemics, like fanning out to deliver vaccines to virus hot spots.

  • In the U.S., the FAA still must clear the way for drones to fly longer distances.
  • San Francisco-based Zipline, which uses drones to deliver blood and medical supplies in Rwanda, is working with the U.S. Department of Defense on a rapidly deployable drone system in case of a mass casualty humanitarian event.

Yes, but: The temptation during a humanitarian crisis might be to rush technologies to the scene before they're ready, even bending regulations to do so, which would be a mistake, disaster recovery experts warn.

  • "You don't want to experiment on people and make things worse," says Robin Murphy of Texas A&M University.

Read the full story.

3. GM's electric reset button

GM CEO Mary Barra. Photo: GM

GM laid all its cards on the table this week in an effort to convince investors, journalists — and ultimately, consumers — that it is all-in on electric cars.

Why it matters: GM has occasionally pulled back the curtain on strategy before — usually when its future is in doubt.

  • This time, company executives went deep into detail to try to show their electric vehicle strategy is more than a regulatory-driven ploy and instead represents a complete transformation of GM's business.
  • "This is the biggest opportunity any of us has ever seen in this company," said president Mark Reuss, whose father also served as GM president in the early 1990s. "It's an opportunity to reinvent our company and reset our brands."

Driving the news: GM laid out a comprehensive, $20 billion strategy to produce a wide array of electric vehicles between now and 2025.

  • It showed prototypes of the first 10, including a Hummer pickup and SUV and a high-tech Cadillac crossover utility.
  • Those vehicles will be revealed publicly in the next few months and go on sale in 2021.

Between the lines: Starting with a clean sheet, GM designed a new modular electric vehicle platform that can be stretched or squeezed to underpin everything from urban taxis to luxury cars to work trucks.

  • It also developed a new lower-cost battery technology with longtime partner LG Chem that can be packaged in different formats to suit each type of vehicle.
  • The company says that reduced complexity will help GM lower costs and sell electric vehicles profitably.

Here are my key takeaways. GM's EV strategy is:

  • Bold: It skips over bridge technologies like hybrids and plug-in hybrids.
  • Efficient: It leverages existing plants and equipment, and the modular battery architecture is easy to manufacture.
  • Comprehensive: It touches every brand (Chevrolet, Buick, GMC and Cadillac) and includes EV chargers and dealer support.
  • Growth-oriented: It targets new customers, especially on the east and west coasts, as well as tech licensing revenue.
  • Risky: It's a $20 billion bet that assumes skeptical buyers will change their minds about electric vehicles.

The bottom line: GM is trying to thread a needle by maximizing sales of today's profit-spinning trucks and SUVs while delivering on its long-term vision for a cleaner, less congested world.

Go deeper: GM begins historic shift to electric vehicles

4. Driving the conversation

Backup: Coronavirus snarls trans-Pacific shipping and ripples through U.S. business (Jesse Newman and Jennifer Smith — Wall Street Journal)

  • Why it matters: Global shipping is a carefully calibrated industry but trade flows got out of whack when coronavirus crippled Chinese factories back in February. Now a container shortage is pushing up transportation prices for U.S. exporters and sowing turmoil on the heels of a painful trade war.

Retread: This futuristic tire concept regrows its tread by popping a pill (Victor Tangermann — Futurism.com)

  • How it works: Although still just a concept, Goodyear's tire could regenerate tread made from organic spider silk and dandelion rubber by activating a liquid capsule on the rim — think of it as a Tide Pod for your car tire.
  • Why it matters: Tires wear out must faster on electric vehicles.

Broke: Ex-Uber self-driving head declares bankruptcy after $179 million loss to Google (Paresh Dave — Reuters)

  • Why it matters: Once a key engineer on Google's self-driving car project, Anthony Lewandowski is fighting a federal indictment for stealing trade secrets from his former employer to start a rival company later acquired by Uber. The saga continues.
5. What I'm driving

2020 Cadillac XT6. Photo: Courtesy of Cadillac

I just spent a week in the 2020 Cadillac XT6, a new three-row, family-friendly crossover utility from GM's luxury brand.

The big picture: The XT6 is a new entry that slots in below the brand's flagship Escalade SUV, and shares underpinnings with the smaller XT5 crossover, its best-selling model.

It checks most of the boxes you'd want in a luxury crossover, including a long list of driver assistance and safety technologies.

  • Most are standard, but you can pay thousands more for enhanced features including rear pedestrian alert and night vision.
  • It comes in two versions. The Premium Luxury starts at $53,690 ($54,695 for AWD) and the Sport version starts at $58,090.
  • My fully loaded test drive was $70,890.

My thought bubble: Although it looks like part of the Cadillac family, the XT6 feels like a placeholder, especially after I saw what GM has in the pipeline with the all-electric, tech-oriented Cadillac Lyriq.

  • Cadillac is in desperate need of a makeover, and the XT6 can't hold a candle to the Lyriq.