Whenever something major happens that puts critical products in short supply, two things inevitably follow. First, there is a major "coming together" with diverse groups, companies and organizations forming unlikely collaborations to get done what needs to be done.
That definitely occurred this year with the onslaught of the novel coronavirus pandemic. It was amazing to see the stories of ingenuity and determination to turn around projects in weeks or even days, when the normal cycle could take many months. There was an outpouring of support to make sure the frontline soldiers in this battle—the first responders, health care workers and many others—were properly equipped.
The second thing that occurs in situations like these is to ask why the U.S. industrial sector isn't positioned to supply these needs on an ongoing basis, to avoid the scrambling that occurs when a crisis of this proportion spotlights the inadequacy of the U.S. to manufacture many of these goods.
That was the topic of recent hearings before the U.S. International Trade Commission. And while there were stories of companies that had retooled to provide essential goods and components, there also was a message by others that reshoring isn't that simple.
A professor of engineering and public policy at Carnegie Mellon University in Pittsburgh said there's no easy explanation why manufacturing isn't as big in the U.S. as many think it should be. It's not just tariffs or price manipulation by foreign governments. "This is a global economy with a lot going on," was as close as she could pinpoint her answer.
Two stories from the pandemic offer a glimpse of just how complicated the answer can be.
In one case, Nishikawa Cooper L.L.C. had one of the most heartwarming tales of the year. Workers who easily could have stayed safe at home on furlough and collected enhanced unemployment benefits instead volunteered to make protective gowns to help in the supply effort. The project got so much attention that one hospital system asked Nisco to consider making the gowns and other medical goods full time. The hospital system didn't want to have to rely on overseas imports from China for such crucial products.
But in the end, Nisco passed on the idea, knowing that it would take investment and they still would not be able to produce the medical goods for what the foreign competitors could sell them for. It's one thing to pitch in and help when the pandemic spikes demand for some products, and something totally different to make them domestically on a full-time basis.
On the flip side, Showa Group, the nation's only manufacturer of nitrile gloves, is investing $20 million to bring in two high-speed production lines and double capacity for the gloves at its factory in Alabama. The high-tech equipment will make the venture cost-effective for Showa.
Glove demand has gone through the roof this year, but the company actually started the project before the pandemic hit. Showa, though, wanted to make sure it had business upfront for the new output, signing two customers to long-term agreements that make the expansion much less of a risk.
These are just two stories of companies that made opposite decisions, and in each case the choice was the right one for them. As the Carnegie Mellon professor said, it's complicated.
