U.S. to increase NBR, make gloves using Defense Production Act

WASHINGTON—Efforts are under way to dramatically increase rubber glove production on U.S. soil using the Defense Production Act, which traces its history to the Korean War and is inspired by efforts to defeat the Axis Powers in World War II.

Tim Manning, national supply chain coordinator for COVID-19 Response Team, said the federal government is in contract talks to create both new nitrile rubber production facilities as well as finished glove plants to produce a billion gloves per month.

While legalities prohibited him from providing specifics before contracts were signed, he did say the federal government was in negotiations that could result in agreements in the very near future.

Ramping up domestic production of gloves on such a large scale would significantly reduce dependency on foreign manufacturers. Currently, a small percentage of gloves are produced in the U.S., and manufacturers in Asia dominate worldwide production.

This has caused grave supply chain disruptions during COVID-19 as health care institutions and their workers struggled to provide services amid a worldwide gloves shortage. The lack of personal protective equipment laid bare the country's vulnerability and dependency on overseas producers of a variety of products. Masks and gloves became poster children for the overall problem with PPE supplies.

As PPE supplies plummeted, prices skyrocketed as countries around the world fought to secure what they could for their own.

"We are very focused on procuring the personal protective equipment—PPE—to keep America's front-line health care workers safe," Manning said during a public meeting in early February. "There is a grave need for masks, shields and gloves. … We currently aren't producing these at the rates we need to keep up with demand."

The federal government, Manning said, was "already working to increase the availability of N95 masks. But another critical area is surgical gloves. Right now, we just don't have enough gloves. We are nearly 100-percent reliant on overseas manufacturers to export to us our country's surgical gloves to protect health care workers."

Not enough gloves

American Performance Polymers L.L.C. of Colebrook, N.H., is in the middle of a major expansion that will allow it to produce 500 million medical gloves each year.

The expansion project at the subsidiary of Renco Corp. is being spurred on by a recent $22 million contract the company won from the U.S. Department of Defense.

Not only is the company improving existing manufacturing lines, it's adding about 95,000 square feet of space to install two new high-speed lines. They each will measure about 450 feet in length.

Employment has increased from about 10 workers prior to the contract to about 160 workers now, Renco CEO Richard Renehan said Feb. 16. He's happy to see the federal government using the DPA to return significant glove production to the U.S.

"They've got to do something. We're importing 99.99 percent of the gloves for medical applications in America. It might as well be 100 percent," he said. "It's great, believe me. I think it's phenomenal. It's the right move."

Manning said production levels of 1 billion gloves per month would meet "half of all the U.S. health care community demand" needs when he announced plans for the new plants.

But Renehan said that figure will only put a small dent in the need. He suggested the aim should be more like 2 billion gloves a month.

"It's such a small capacity enrichment, let's call it, that it's going to take a long time to have a significant impact on domestically produced gloves and raw materials," Renehan said. "You've got to start somewhere, right?"

Creating more domestic supply will help the country meet its current pandemic needs and could, at some point, prepare for future emergencies by putting gloves into the national stockpile. It will be a balancing act, however, to meet current and future needs.

Manning said the U.S.' inability to meet its own glove and mask demand is "unacceptable."

"We're using all of our authority to fix it," he said. "We will build plants to build the raw materials, nitrile butadiene rubber for surgical gloves here in the United States and will help build factories to make those gloves right here in the U.S. as well."

Authority to kick start the domestic glove industry comes after President Biden signed an executive order not long after taking office, allowing the federal government to get involved in the issue. Rubber gloves were just one of a dozen "critical categories of supplies" identified as experiencing shortfalls by the administration, Manning said.

"I know there is a great deal of interest in exactly where and with whom we are contracting. For reasons for procurement laws, I'm not able to disclose the ongoing contract negotiations until they are finalized," Manning said.

What is DPA?

The U.S. is tackling the glove problem through the Defense Production Act. A pair of War Powers Acts, enacted in 1941 and 1942, gave the federal executive branch broad authority over industry.

"Much of this authority lapsed at the end of that war, but the beginning of the Cold War with the Soviet Union in the late 1940s and the North Korean invasion of South Korea in June of 1950 caused the Truman Administration to reconsider the need for stronger executive authority in the interest of national defense," reads a report from the Congressional Research Service regarding the DPA.

DPA has lapsed and been reinstituted many times in the ensuing seven decades, depending on the country's particular needs.

The original DPA had seven separate sections that gave presidential power "to demand that manufacturers give priority to defense production, to requisition materials and property, to expand government and private defense production capacity, ration consumer goods, fix wage and price ceilings, force settlement of some labor disputes, control consumer credit and regulate real estate construction credit and loans, provide certain antitrust protections to industry, and establish a voluntary reserve of private sector executives who would be available for emergency federal employment," the report states.

Eventually, four of the seven so-called titles, or sections, involving requisitioning, rationing, wage and price fixing, labor disputes, and credit controls and regulation, lapsed in 1953.

Current DPA authority includes "priorities and allocations, which allows the President to require persons (including businesses and corporations) to prioritize and accept contracts for materials and services necessary to promote the national defense."

Another section relates to the expansion of productive capacity and supply. This "allows the President to incentivize the domestic industrial base to expand the production and supply of critical materials and goods. Authorized incentives include loans, loan guarantees, direct purchases and purchase commitments, and the authority to procure and install equipment in private industrial facilities," the Congressional report states.

A section of the act under general provisions outlines the authorities given to the federal government through the act. They include the ability to establish voluntary agreements with private industry, block proposed or pending mergers with foreign corporations, acquisitions or takeovers that threaten national security, and authority to employ people with "outstanding experience and ability" and to establish a pool of industry executives to be available to help in the interest of national defense, the report continues.

Renco's Renehan, meanwhile, also sees the future potential for the U.S. to not only better meet its own glove needs but also become a supplier to other countries. But that would take time.

"Our country has to reassess how to handle industrial management. Because there's a huge export market for us at our fingertips. There's a lot of countries that don't want to buy from China or other Far East countries for whatever reason. And they do want to buy from America, and they should be encouraged, incentivized to buy from America," the CEO said.

"We feel we can be competitive on the global stage once again by reshoring these jobs. We're going to have advantages in energy costs, automation and, with the DPA's support, raw material production as well," Renehan said.