Question

cite a current issue facing a U.S. firm or industry, along with some implications, and relate how that company / industry is responding to that situation. Make sure you include enough details in your analysis. For example, Health Care costs, Covid-19 and / or Wage issues are plaguing a number of small to medium-sized firms as well as the Auto industry. This contributes to negligible employment and sluggish economic growth. Other suggested topics include but are not limited to: Financial Markets; Industry and Innovation; Pharmaceuticals; Unions vs. Non-Union Labor trends; Airlines; E-Commerce; Energy; Infrastructure; Telecom; Banking; Technology; Cyber-Security; Insurance; Crypto-currency; Student Debt; Universities; Trucking; Railroads; Retailing; etc. Individual firms can be used as well - for example: Netflix; GE; Macy's; Tesla; Ford; Facebook;  to name a few.

Answer 1

The US oil market was flourishing and the phase of boom in the US made it easy for the companies to finance growth through borrowed money. The pandemic induced a supply shock with the closure of all firms and industries and the prolonged duration induced a demand shock and led to collapse of the oil prices. The demand for oil drastically reduced pushing down the price to $24 a barrel and also induced a price war between Russia and Saudi Arabia. Companies are struggling to make the payments and also interest to the debts hence turning to restructuring advicers and some according to reports will file for bankruptcy soon.The stock index and price of bonds of the energy companies have drastically reduced. The oil companies even before the pandemic were in crisis due to wamer winter but the problem increased due to the pandemic and the price war.The companies have reduced their capital spending by cancelling hydraulic fracturing crews and certain drilling rigs.The job losses is significant and is estimated to be worse than any of the previous recession. The companies are trying to adjust by reducing the pay of the top officials by 50% and reducing capital budget by 40 % and estimate to keep the barrel price around $ 30 to $35.