The sound in Patrick McMahon’s voice before the chief operating officer of Le Bus Bakery in King of Prussia hung up the phone with me Thursday night — there’s just no word for it.
“I have to go lay off some people now, Maria,” he said.
Help from Washington to stabilize the trembling economy from top to bottom cannot come soon enough, as economic calamity from the coronavirus is striking with force at workers and businesses like this beloved artisanal bakery. Le Bus is a name that over decades in and around Philadelphia has become synonymous with entrepreneurial spirit, innovation, and downright delicious bread.
But it is being knocked around from all sides as the virtual shutdown of industry and consumer spending is the price we are paying while racing to defeat a novel virus for which there is no vaccine and little treatment.
The carnage has been swift and unpredictable.
As recently as 10 days ago, when I sat across from McMahon at his office in Montgomery County, he thought Le Bus might hold firm. Stock markets were plunging as he and I spoke that Monday — it was March 9. Orders for fresh and frozen goods remained fairly normal as restaurants across America remained open.
That was then.
The extraordinary order in more recent days that Americans hunker down in their homes for the foreseeable future has caused immediate damage on every level of the economic ecosystem.
Governors have shut down public schools and restaurants, professional sports leagues have iced their seasons — all of this to keep COVID-19 from spreading much further and, as experts fear, potentially swamping our hospital systems with patients in need of acute respiratory or intensive care.
As a result of this unprecedented economic contraction, Le Bus is telling nearly half of its roughly 200 workers that they are laid off by the end of this week. There was no way around it. A precipitous decline in regional and national orders followed the closure or curbing of operations at eateries locally and in many states across the country over the weekend.
“I wish I had a crystal ball,” McMahon said when I asked how long the bakery could keep kneading loaves and shipping out pastries even at half its normal force. “We aren’t sure whether or not we’ve hit bottom yet."
And yet, he added this vow of defiance: “We intend to survive. We absolutely intend to survive.”
The company is struggling to untangle some tough questions — the kinds of questions that are hard to answer without more clarity about the science behind this virus, which first became known to the world around the beginning of the year after it broke out in China.
“We don’t know how many restaurants are going to be able to do takeout forever. Whether or not takeout is going to be able to sustain them, and therefore are they going to continue to purchase from us,” McMahon said. "We don’t know if people have the disposable income to keep going to takeout restaurants.”
Before last week, I hadn’t written about Le Bus in years. In fact, it was our nation’s last calamitous economic episode — the Great Recession — that prompted my first piece about this business.
It was November 2007 — a full year before the bankruptcy of Lehman Bros. underscored that our economy was in a recession so devastating that some argued it was a depression.
I’d called Le Bus because the economy was starting to do very strange things at the time. Commodity prices were out of control. Crude oil prices were spiking and sending flour prices, among other staples, right on up with them.
“Catastrophic” was how Le Bus owner David Braverman described the challenge at the time, while also saying they were managing it by being “very, very careful."
What’s happening to our economy now is incomparable. Consumer spending has come to a precipitous halt. Businesses and corporations have sent their workers home. Schoolchildren are no longer in class. City skyscrapers are empty.
All within a matter of days.
Unemployment claims in Pennsylvania, as my colleagues reported this week, are skyrocketing. Beyond that, untold numbers of workers are ineligible for unemployment or other no-strings-attached cash relief — independent contractors and, yes, small business owners among this group.
McMahon said most Le Bus workers are eligible for unemployment and may extend medical coverage by paying for it monthly. At least for as long as Le Bus is able to continue operating.
As the White House and lawmakers in Washington allegedly have been hustling to hammer out some sort of titanic bailout plan that remained still on the drawing board on Thursday, there was no clear indication how any of it would help a business like Le Bus as long as containment of the virus remains elusive.
“I don’t think that the government has the capacity to replace what is being lost by the huge number of businesses that are dealing with this,” McMahon said. “I think this could end up being a real calamity.”