Protective Health Gear started selling the masks last September. Customer demand was closely tied to the number of Covid-19 cases in the United States, and as the winter surge took hold in December, orders “skyrocketed,” Wolin said, making it difficult for the company to keep pace. But the bulk of the company’s sales came from the general public, not from hospitals, distributors or government agencies that buy masks wholesale, he said. Regarding these contracts, “we have always lost to the cheapest company,” Wolin said.
Often, he said, these cheaper competitors are based in China.
“We pay overtime. We pay double on weekends, “ said Wolin. “When it comes to overseas production, we can’t compete with the cost of labor.”
“As long as foreign masks are available, [hospitals and other US buyers are] will continue to buy them, ”said Mike Bowen, vice president of Texas-based mask maker Prestige Ameritech. Bowen has warned for years that the United States’ reliance on cheaper foreign masks poses a national security concern.
The solution, he said, is to stop all imports. “Any government plan that allows foreign masks in the United States will fail to secure the supply chain,” he said. He believes the US government should use all the tools at its disposal, including tariffs and subsidies, to achieve this goal. But he doesn’t hope the government risks this kind of upheaval with Covid–19 still expanding. “I think the pandemic will end without securing these supply chains,” he said.
In addition to the small producers entering the market, several large manufacturers also significantly increased their production last year. Honeywell has increased its production capacity of N95 by 50 to reach one billion per year. 3M tripled the production of N95 and other respirators in 2020 compared to 2019. And, at the same time, according to Bown research, the amount the United States spent on imports of PPE from China has more than tripled.
Shortly after taking office earlier this year, President Joe Biden signed two executive orders calling on federal agencies to review the United States’ PPE supply chain and identify potential gaps in domestic manufacturing capacity. . “We shouldn’t have to rely on a foreign country, especially a country that does not share our interests or our values, in order to protect and provide for our people in the event of a national emergency, ”he told reporters in February.
The White House told CNN that significant progress has been made in reducing imports and prioritizing domestic production of PPE. According to Tim Manning, the administration’s national Covid-19 supply coordinator, in the United States “[the] the current estimate is that the manufacturing capacity is what we believe to be unconstrained demand [in the US]. “A report from the government accountability office in July confirms this, showing that in March of this year, the estimated production capacity for N95s in the United States had exceeded the estimated domestic demand.
In addition to the billions of dollars already committed to bolster domestic manufacturing in the administration’s US bailout, he said more money is coming and the administration is “rethinking” how it creates its contracts with the administration. suppliers to focus on products made in the United States. He is also having conversations with group buyers for hospitals and state and local government officials about purchasing PPE made in the United States, he said.
Planning for the next pandemic
The key question for the US government, however, is how much domestic production it should sustain in times of low demand “to facilitate increased production in the event of a pandemic,” Bown said.
Even though the White House says there is enough manufacturing capacity in the United States to meet demand now, there is also a risk that it will disappear as the pandemic abates. Honeywell says it has already ended manual production efforts for N95s at two facilities, although the company says it has maintained automated lines at other sites.
Wolin said his business needs government support to be able to survive lean times and be there when it matters. When the CDC relaxed its mask guidelines in May, demand fell off a cliff. Protective Health Gear has grown from 150 employees to 15. Now, as demand increases due to the spread of the Delta variant, they have dropped back to 65 (hiring turns out to be another major challenge).
Wolin said he was in talks with the government on purchasing his N95s for government agencies and the National Strategic Stock, but so far no deal has been reached.
“We’re not asking for documents. We know you need these particular supplies and we’re just asking you to buy what we have,” he said.