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If you imagine a business making surgical facemasks is working 24/7, guess again

332 points by smacktoward 7y ago

tomohawk 7y ago
“If y’all don’t care about me in good times when everybody’s OK, how am I going to be there when you need me?” Hopefully this will change. We need companies like this, and we don't need to be supporting the CCP's human rights violations.
- wccrawford 7y ago
  It won't change. People will always act in their own interest. They're not going to pay 5x the price for masks (2c from China, 10c from this guy) if they don't have to. Who knows when this will happen again? They might pay those higher prices for 10 years (which is apparently how long it's been since last time he had to ramp up production) before it makes any difference. They likely also won't stock up on masks for financial reasons, too. It costs money to have storage space for them.
  - toss1 7y ago
    ... and THIS is exactly why we need a functioning government and why government is NOT like a business In business, the main concern is optimizing product and cost. Extra inventory and capacity is considered wasteful, not adding shareholder value this quarter or this year. the govt's job is to build the infrastructure (physical, legal, technological, etc.) and ensure preparedness. Calculate the greatest plausible need, and ensure that the resources are there to meet it. That is why we pay for firehouse & firemen to, we hope, hardly ever work, pay for soldiers to, we hope, mostly shoot at targets, etc. This is why we should not be outsourcing entire supply chains, even if it is most profitable. Some second sourcing, sure, but critical manufacturing capability and intellectual property capability offshoring is just foolish.
    - akvadrako 7y ago
      This is actually an example of how the government should be run like a business. Paying 10x the amount for masks to ensure they are available when needed would have saved money in the long run.
      - toss1 7y ago
        In theory, yes. But I have almost never seen a business ACTUALLY do that, and have watched decades of management consultants actively advising AGAINST that type of management. Aside from the general issue of offshoring the production capacity and know-how (as if it were somehow fungible & low value), the JIT (Just In Time) inventory movement has also taken over the entire industry. So, instead of maintaining stockpiles of input materials with associated costs of storage space and idle capital, they spend costs to manage networks to try to ensure that it arrives "Just In Time". Great while it works, and if done properly, it can be robust to handle single supplier disasters. But, the more rare broad events like this kill everything. The MBAs might even argue that paying 10x to ensure availability isn't even economical, as the events requiring you to pay 100x don't add up to the total 10x cost. But the real issue is that no business is managed to handle the tail risk (the rare, low-likelihood events with disastrous consequenses). Any business that does manage for tail risk -especially at the level that a govt should manage for tail risk- will be outperformed by any biz that manages for normal circumstances. They will likely fail. Consider trying to setup a for-profit local fire department. You are paying $$millions for equipment and must pay skilled workers to sit around and polish the equipment almost every day. The customers and other regulators are actively working to ensure that you are never needed. When a fire does happen, and you show up and demand payment or ccard (assuming the homeowner is even present and not inside the fire), most of the time they can't pay, so you have no sale. Your fire department would go bankrupt quickly. The only solution would be for everyone in the coverage area to pay into a fund supporting your company, and get service whenever they need it. You'd need to make sure that EVERYONE paid in and there were no freeloaders. Congratulations - you've just invented government, not a business.
        akvadrako 7y ago
  - benjohnson 7y ago
    >>It costs money to have storage space for them. $40 per employee. My five-man IT company have enough PPE to keep going for 120 days. It cost us $200 a year to maintain it - or $40 per employee. We have N95, face-shields, and Tyvek bunny suits. We even have N100 half-face respirators for a really serious pathogen. EDIT: It does cost for storage. At $25 per sq-ft for real estate, it add $50 to the cost. So a total of $50 per employee. (We have prudently given a lot to the local hospital as we've been working primarily from home. We've also been 3D printing face-shields.)
    - greedo 7y ago
      Not judging, but why does a five-man IT company require PPE? I've been involved with DR/BCP for 20 years and this has never come across my radar.
      - dylz 7y ago
        California OSHA has made it a legal requirement for companies to have N95 masks for employees in the past.
        greedo 7y ago
        Thanks! I haven't worked in CA for over 2 decades, and in the Midwest this requirement would be viewed with a jaundiced eye.
        dylz 7y ago
        A lot of people were asking WTF about Facebook, Apple, etc having tons of masks - CA pretty much had temporary mandatory "you must have enough for all of your workers" declarations during wildfires.
      - benjohnson 7y ago
        Great question! Day to day it's quite useful - I don't want to send my guys into a sketchy attic that may have glass fibers, rat turds, black mold, and asbestos to check on a network cable and I don't want them to lose and eyeball when using a power drill. We also spend a fair amount of money on ladder safety - looking at the OSHA data, that a great way to maim yourself.
mrosett 7y ago
One angle that this article missed: anti-price gouging sentiment has a lot to do with why the factory isn’t running 24/7. Imagine if he could charge 10x his normal price (ie $1/mask, which is much less than the value a mask provides.) I suspect plenty of employees would happily work 100 hour weeks for the duration of the crisis if they were getting paid $150/hr. Instead, he’s forced to take a slower, more conservative approach to ramping up to avoid risking bankruptcy.
- gpm 7y ago
  From one perspective this is true. From another perspective, he's having trouble getting long time contracts. Hospitals could give him that extra 90c per mask (10c per mask per the article, 1$ suggested price in your comment) by signing a contract to buy x masks every year for 10 years instead of just signing a contract to buy x masks. It seems that the actual problem might just be hospitals being stingy.
  - mapgrep 7y ago
    Not an extra 90 cents per mask, an extra 8 cents per mask. “His masks may cost a dime each, but a made-in-China mask might go for two cents.” A hospital charged my friend $5k for three stitches. They could pay 8 cents more per mask. But they care more about $$$ than the long term health of the country. And I’m not even making a moral statement with that. It’s the natural consequence of making health care a capitalist endeavor. There are other approaches.
    - gpm 7y ago
      > Not an extra 90 cents per mask, an extra 8 cents per mask. We're suggesting the hospital giving him 1 dollar per mask instead of 10 cents during the crisis, that's an extra 90. 98 cents compared to the Chinese prices. I guess my proposal makes it a bit less. With the 10 year contract, assuming that the demand spike only exists in the first year, it would be an extra 90 cents - savings of (9 years * 2 cents / year) = 72 cents per mask. This could be "fixed" by extending that contract for a few more years.
burlesona 7y ago
It is shameful that the US has abandoned its manufacturing base and allowed its productive capacity to be destroyed. The pandemic exposes how weak this makes us, but I don’t know that things will change when the pandemic eventually ends. Once things calm down, I doubt people will retain the ability to see the downsides of always chasing the absolute lowest cost supplier.
- deburo 7y ago
  There has been a lot of discussions politically around that overall, the covid merely but harshely exposing the medical aspect. It's a space to keep an eye on after this pendimic, I wouldn't be so pessimistic about it.
- philwelch 7y ago
  When this is all over, we’ll have a lot of unemployed workers and a devastated service sector. It will represent an opportunity to rebuild an industrial base. During the Second World War the US not only managed economic autarky, but we had enough agricultural and industrial capacity left over to feed, arm, and equip much of the free world. We lost that through complacency and the past 40-50 years have been a series of escalating kicks in the teeth. Maybe this will be enough for things to change.
  - gruez 7y ago
    >It will represent an opportunity to rebuild an industrial base. How would this work? Who is going to buy all those expensive (by asian standards) american-made goods? >We lost that through complacency AFAIK we lost it because of globalization, which caused the labor market to be flooded cheap labor from developing countries.
    - erik_seaberg 7y ago
      This. Trickle-down economics does work, but when capital has access to global markets, it trickles way, way down past our own labor pool.
    - 7y ago
Aloha 7y ago
I cannot blame him one bit, and as a small business, he cant absorb the losses from having to scale back either. I sincerely hope the lasting change from this crisis is a changing attitude towards where we build things.
54351623 7y ago
Why can't N95 mask production be completely automated so production can quickly scale with demand while also keeping costs down?
- 9HZZRfNlpR 7y ago
  Scaling up means a lot investment but what happens when the demand goes down? You're left with debt from it and little demand. The scaling as such is not the problem here.
  - 54351623 7y ago
    Scaling as in just let the machines run longer, normal hours to 24/7 or whatever is necessary, there's more room for a nuanced production if less people are involved right? For clarification I didn't mean scaling as in buying more machines, which I agree would likely require prohibitive investment. Of course keeping a few machines in the wings is probably cheaper than overtime and unemployment. [edit] I'd also like to know how difficult it would be to just switch the machine over to making cheaper, non-medical grade masks as demand changes?
    - 9HZZRfNlpR 7y ago
      It doesn't work with specialized machinery like it does with servers aka "cloud". Machines that are reliable 24/7 workhorses cost money, when the demand is down you cannot share them over the internet so others can do something useful with them. I suppose it's more realistic with cnc or 3d printing but even then it's not that simple mission, this small company wouldn't most likely try or want to be "aws but for x robots" : ) I suppose if you think about 3d printers, plastic molding, cnc, then we are slowly going to this direction.
      - 54351623 7y ago
        I didn't mean renting them out but rather switch to masks that I assume have a higher demand with lower production standards. I'd be willing to bet that you are right though and that the machines currently being used wouldn't be capable of producing much besides masks.
lazyjones 7y ago
Sad story, but if he had kept the employees and built a stockpile at a loss, he'd quickly recover those past losses and score a huge profit now. So: believe in your product and mission, pandemics do happen. A solution for the future would be be high import taxes for products of "national interest".
- neltnerb 7y ago
  If your creditors and landlord don't believe in your product and mission, I'm not sure how that's actionable. Small businesses aren't in a position to make big financial bets. If Goldman-Sachs wanted to stockpile masks made at 10 cents each and take on the risk of never being able to sell them, great. I cannot fathom how someone running a non-diversified business could possibly make such a choice.
  - lazyjones 7y ago
    > If your creditors and landlord don't believe in your product and mission, I'm not sure how that's actionable They own their plant, as 30 seconds of research show. https://www.prestigeameritech.com/press-releases https://www.prestigeameritech.com/press-releases They've been in the business long enough and through at least one pandemic before (see below) to make this something other than a "belief" issue. Even small companies can build reserves if their business model works.
- raincom 7y ago
  Of course, you suggest the company to gamble. Borrow money, build a stockpile at a loss, and wait for a pandemic. What if the pandemic doesn't strike, before they file for a bankruptcy?
  - lazyjones 7y ago
    Since they've already been through a pandemic once before, it's not much of a gamble. Building reserves isn't risky: Prestige Ameritech's sales have doubled in recent weeks, forcing the company to maintain a seven-days-a-week production schedule to keep up with demand. http://content.time.com/time/health/article/0,8599,1899526,00.html http://content.time.com/time/health/article/0,8599,1899526,0... (2009)
philcrocket 7y ago
Wow. Looks like he learned his lesson. On the other hand, we American consumers haven't. I'll echo what most have said here already: the moment this crisis is over, we'll be overseas trying to find the cheapest possible price. We don't care about keeping the local guy in business. We care about our margins. I'd hate to say it but what made us great, could very well be our downfall...
- blackrock 7y ago
  “Your margin is my opportunity.” -Jeff Bezos
titanomachy 7y ago
Seems like a good opportunity to sign 5-year supply contracts with healthcare organizations.
- jdbernard 7y ago
  The article doesn't give details but it sounds like that's what he tried last time and is what he trying again: Hospitals promised to stick with him afterward, but they broke their promise. And later Now, it’s only selling to U.S. hospitals. But Bowen asks hospitals to sign contracts. Who can blame him? Or as the mayor puts it, “He’ll gear back up, and he’ll produce, and they’ll probably do it to him again.” I imagine as a small business he may not have pockets deep enough to pursue legal action against hospitals that are breaking contacts.
danvoell 7y ago
Something about this story doesn’t add up. If this were 99% of the manufacturers I know, they would be operating 24/7 right now. Call every available temp agency and load that place up. The only fathomable excuse is if they can’t get enough material. The guy running this company sounds like a politician not a businessman. Edit: not sure why I’m getting downvoted. I’m serious. If this company were near me I would be asking if I could run second shift. In theory this guy is both leaving hundreds of thousands of dollars on the table per day and contributing to our country’s deficiency of equipment while trying to argue for some sort of long term agreement because he has leverage at the moment.
- raincom 7y ago
  Why should the company take risk to order new machines, hire employees and train them, only a few months later to reduce the manufacturing capacity? Why should he take risk? If people want it that bad, give that company 10 year contract. I support that company's decision to not take risk, as he was burned before.
  - danvoell 7y ago
    I can understand the machine part, I also wouldn’t order machines or hire long term employees and would only take steps that help my immediate situation. I would hire temp workers and at a minimum be working 7 days a week. Add a pre-order field on your website.
    - deleted 7y ago
      [deleted]
- beerandt 7y ago
  Read the story. It's what he did in 2009 and got burned by it. Almost bankrupted him. He's learned his lesson.
  - deleted 7y ago
    [deleted]
gruez 7y ago
I took a quick skim of the article and it looks like all it would take to solve this problem is for him to raise prices (clearly the current prices are below the market clearing rate) and forcing customers to pay upfront (or at least put the money in a trust or something). >“Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.” Doesn't seem to be a real issue if those extra costs are factored in >Hospitals promised to stick with him afterward, but they broke their promise. The allure of cheaper Chinese masks was too great for hospital purchasing groups to ignore. Ask for money upfront, or get it in writing and sue later.
- BurningFrog 7y ago
  Raising prices in a crisis is probably criminal under price gouging laws.
  - mixmastamyk 7y ago
    And there was no room to raise them in quiet times either because they were already more expensive than imports.
  - gruez 7y ago
    Addressed here: https://news.ycombinator.com/item?id=22789745 https://news.ycombinator.com/item?id=22789745 Also, if the situation is really dire, I'm sure the government can grant him a waiver
    - jdminhbg 7y ago
      “Probably” not illegal is a hell of a risk to take. All it takes is one prosecutor who thinks he can make his career over crushing pandemic profiteering and you’re screwed. It doesn’t even matter if you somehow win in the end.
    - austhrow743 7y ago
      The government can also place a long term order but they haven't done that either.
jmckib 7y ago
The question that this story doesn't answer (unless I missed it) is why hospitals are refusing to sign contracts right now when they are so badly in need of masks. Either that, or pay whatever price is necessary to get the factory to produce more masks without a contract. Is it lack of budget? Legal/administrative hurdles? Something else?
- missedthecue 7y ago
  Almost all hospitals don't make profit. They don't have the $$ to sign contracts like that for everything they need.
  - lonelappde 7y ago
    They don't make corporate profit because they funnel the money to management salaries and adminstration companies.
    - greedo 7y ago
      And many operate as non-profits to shelter income.
    - missedthecue 7y ago
      Whether this is true or not doesn't change my point
- x0x0 7y ago
  For starters, this guy doesn't actually make the masks hospitals need. They need n95 masks; this company makes plain surgical masks.
  - dwaltrip 7y ago
    Don't hospitals need both?
    - x0x0 7y ago
mike_h 7y ago
This is a red herring issue. The problem isn’t that Chinese won’t sell the US masks. It’s that the US is trying to buy too many too late. We could have spent the past decade stockpiling them. American protectionism is actually part of what created this problem: it was only this week that the Chinese KN95 standard was approved for use by the FDA.
- partiallypro 7y ago
  Ironically USA Today ran a piece (not opinion) about the Obama administration using the strategic stockpile for various things during his tenure, but never refilling it.
  - kevingadd 7y ago
    Yeah, over the last decade+ a mixture of legislators refusing to fund the stockpile and government officials opting not to restock parts of it has left it pretty heavily depleted. When given limited resources you're going to prioritize the most important things and they ended up choosing stuff other than masks and ventilators.
  - weaksauce 7y ago
    yeah I see the rationale for it being that they were developing a new mask type that would be comfortable and reusable that they could stock up on. they didn't think that the entire global infrastructure would be so overwhelmed that they couldn't procure them in time. turns out they should have known to keep a reserve of them(100m was the number they would have stocked, though 300m is needed for this particular pandemic) now obama's team didn't hoard enough indeed and he deserves a bit of blame but it's also 3 years into trump's term... at a certain point you do need to accept responsibility for your failings and not reupping that supply is a failing.
    - lonelappde 7y ago
      Considering how many billions of dollars get spent on military jets, a few million dollars for throwaway masks seems affordable.
alphabettsy 7y ago
Many voters want the government run like a business, and this is a good example of why you don’t run the government like a business.
travisporter 7y ago
>> “Create American jobs. Buy American. … It’s hot air.” This quote really got me. Being in Texas you would think people value American made.
- netsharc 7y ago
  It's fascinating to read this article after reading the tweets asking "why are we depending on foreign manufacturers for protective gear?!?". Well, the answer was in here, because everyone wants to buy from the cheapest supplier...
  - adjkant 7y ago
    It's almost like capitalism is inherently exploitative and if you are buying American you are no longer gaining wealth for the country by exploiting those outside of it, and then have to choose to either exploit American workers or sacrifice profit! Not aimed at you, just generally this should not come as a surprise that capitalism is generally pretty hard to make work with "Buy American" sentiments in my book.
wonnage 7y ago
Another way to frame the situation: America is in dire need of surgical masks, and its top manufacturer is more interested in martyring themselves than to help out. It seems like this is what the Defense Production Act is for? It's not like GM, where invoking the act doesn't seem to speed anything along because they don't make ventilators normally, and have to spend several days retooling their factories. In this case, you have a manufacturer that has excess capacity and is simply refusing to use it. Also, how is this supposed to make people trust American manufacturers any more than the Chinese? The Chinese are actually _making_ masks at full capacity and exporting them... meanwhile, our own homegrown industries are busy navel-gazing and feeling bitter about some past slights.
- smabie 7y ago
  Probably because China doesn't have (or maybe enforce?) "price-gouging" laws. This 100% wouldn't be happening if we just let people charge what they want for their own property.
  - wonnage 7y ago
    How does this make any sense? China is not price gouging on PPE, at least not to the point where this guy's factory pricing is competitive
    - smabie 7y ago
      We don't know how much money it takes for a Chinese factory to produce these masks. Even though they're cheaper, the prices they charge could very well be considered price-gouging under some State laws. The absolute price of an item doesn't really matter.
hkai 7y ago
Here in Hong Kong, folks have set up six mask production lines already, working round the clock to produce surgical masks. Don't know how they managed to get the equipment but kudos to them. That's because people don't hate businesses and businesspeople, and are thankful for their effort. Low-quality surgical masks here retail for 40-50 USD per box (50pcs), and there are no plans to introduce any price controls. That means that resourceful people are stimulated to abandon their family and regular jobs, and work round the clock to set up production lines, because they want to earn money. I assume in America the sentiment towards businesspeople and pricing is somewhat different.
- mkl 7y ago
  > Low-quality surgical masks here retail for 40-50 USD per box (50pcs) That seems weird. They're half that on AliExpress, including shipping to NZ.
ck2 7y ago
The photos on ebay and amazon of the Chinese factories making surgical masks (not N95) appear to be 99% automated. The machines in that article appear rather different. But it's not just hospitals, all of US is built on "just in time" fulfillment for decades now. That's why a government stockpile was important for emergencies, it's not unrealistic to expect government to have that role. You just can't have people in charge of government that spend all their time dismantling it and expect it not to fail.
solidsnack9000 7y ago
For clothing, the Berry Amendment ensures that the US has strategic capacity, by mandating that certain government purchases are made from suppliers that assemble US fabric with US labor. Maybe there needs to be a similar policy for medical equipment.
- ardy42 7y ago
  > For clothing, the Berry Amendment ensures that the US has strategic capacity, by mandating that certain government purchases are made from suppliers that assemble US fabric with US labor. Honestly, US government policy should be to buy everything that could be remotely considered strategic or useful in an emergency from US suppliers that use US labor and materials. Small exceptions could be made for proprietary things made by NATO allies, but even that stuff should really have a second source supplier located in the US.
catherd 7y ago
The mask situation in the US is truly fucked up right now. I've been finding and sending masks and other PPE to the US from China. Started out for friends and family then it expanded to friends-of-friends, then anybody. It has a really weird dynamic. I've contacted over 100 hospitals. They don't want to help themselves. It's all about pushing people into a web form that fronts a bureaucratic system that supposedly allocates resources efficiently through a central clearing authority (never heard back from any of them), covering their ass in regards to regulatory requirements, and not allowing anyone to take advantage of them by charging money. Individuals aren't much better. They've had so much conflicting information drilled into them that of the few who still think masks are needed by regular people, many feel so guilty about getting them that they can't bring themselves to do it. Or can't wear them in public because people will judge them for taking away from nurses even though the same hospitals the nurses work at have made it clear they would rather have their employees work unprotected than buy something not approved by the FDA or stoop so low as to work with someone who can't donate everything for free. Have had way better success working with retired civic-minded business guys who can buy stuff through their local civic group and just get it done. It takes a surprising amount of almost outright harassment from these dudes to get the hospitals to either accept a donation or come up with a list of what they need and arrange funding, but so far getting hooked up with this type of person has been the only way I've found to get PPE (at least the kind that's still available) into a hospital.
- gamblor956 7y ago
  You're definitely not calling the right hospitals. In LA, hospitals have been accepting donations of masks from people, and purchasing them from local companies. No bureaucracy involved. And it's now rare to see people not wearing masks in LA.
  - edge17 7y ago
    I think he's trying to offer his supply channel to hospitals that are talking about being desperate for supplies. People keep talking about donations, but the reality is that this is a crisis of supplies, not a crisis of money. My experience matches the parent comment here.
xivzgrev 7y ago
Smart to have hospitals sign longer term contracts for supply now. Sounds like he learned his lesson last time. Also this guy sounds kind of butt hurt about buy American rheteroic. I agree but if you are charging 5x on a commodity vs china, I mean rah rah America only goes so far.
jeffdavis 7y ago
There's no way to win selling cheap but critical supplies on the spot market. If the price goes down your customers flee. If the price goes up you can't charge the higher price because that would be "gouging". So his solution is contracts. The fact that people aren't signing them shows their true intentions. What I can't quite figure out is why, during the good times, a $0.10 consumable for a $4000 operation needs to be made more efficient so badly that the only way to produce the thing is in a communist country with no environmental controls.
- PhantomGremlin 7y ago
  What I can't quite figure out ... That's simple to figure out, and it is not specific to hospitals. Some purchasing manager says "hmmm ... I'm paying $100,000 per year for this product. But I can buy it overseas for only $20,000". Score! At the end of the year, that purchasing manager writes a report to his manager saying something like "saved the hospital $10,000,000 by optimizing our supply chain". Or some such. How much some random operation costs doesn't factor into his decisions at all. That's not what he's being compensated for. The only way this mindset changes is if top management insists on it. But usually top management is constantly pushing to cut costs. Their bonuses depend on it.
  - xemdetia 7y ago
    Yeah, this is the kind of way I considered this article. There's so many operations including medical hospitals purchasers that are trying to follow the current mantra of as little idle inventory and wastage of inventory on the shelf as possible for as cheap as possible. This makes sense for people purchasing finished goods but doesn't make as much sense for people making finished goods who may need primary material goods in quantities and timings that do not scale well in increments. It also makes no sense from a machining and tooling efficiency investment to replace a particular operation with a machine to do it 100x as fast if making 100x of the particular sub-assembly completely overwhelms the maximum capacity of the next step unless it is also improved. There's just a minimum volume cost to most finished goods below which it just costs money to do the work at all. Sure if the volumes go way up there's economy of scale at work and the fixed costs of scaling up go down so prices can be reduced in a way that doesn't affect the manufacturing business to be more competitive but there's a bottom in the other direction. You can insulate that with long term contracts from the buyers so that you can get favorable contracts with the suppliers, but when you have purchasers going quarter to quarter and saying lowest price = best value you just are playing a totally different game for a smaller manufacturer. The current model of a small American manufacturing business seems to currently reward doing the same boring product at the same boring volume so that the company will exist in 20 or 30 years by investing in specialist equipment that does one or more steps of manufacturing better than generalist equipment and creating a niche stable market for yourself as the depreciation/fixed cost of that specialist equipment per total units made approaches next to nothing.
jariel 7y ago
There is a serious problem with understanding surpluses here. Do you really care if your monthly water bill is $1 or $5? Think - if you're at $5 a month, I mean you could save 500% (!!) by going to another provider at $1! No - you don't care at all. At such a low price and vast surplus (the difference between what you pay, and what it's worth to you) - other considerations are paramount. The difference between 10 cents and 2 cents is stupid. They could be 50 cents and it would not be 'price gouging' because there's tons of surplus to go around. If we're going to talk about 'gouging' we need to talk about the entire medical system - it's just one big massive gouge. There basically needs to be a strategy of price regulation and sourcing, as simple as that. A simple rule like 'must be bought and fully sourced in the US' is easy, because it still implies a lot of competition. For some products there could be a strategic reserve, and also a strategic production capacity. Same for the entire military supply chain. It's time to re-think globalism.
jupp0r 7y ago
How long does it take to build a mask factory? Maybe we should stockpile machines that can rapidly ramp up production of millions of face masks per day in preparation for the next pandemic.
- jaclaz 7y ago
  > Maybe we should stockpile machines that can rapidly ramp up production of millions of face masks per day in preparation for the next pandemic. Unfortunately that is not how machinery works, you would need personnel to maintain them, and also switch them on periodically, and repair them otherwise your stockpile of machines won't work anymore in - say - three to five years of stockage. And BTW you would also need to have a huge stockage of spare parts, as in the same three to five years the current model (the machines that actually running in production) will be release/model Mark V, and they have different parts from the Mark I you have stocked ...
madaxe_again 7y ago
Article isn’t available outside of the US. I assume it’s about how everything is the greatest, and they’re working 30/8, not 24/7?
- mkl 7y ago
  Install uBlock Origin and try again. The article is the exact opposite of your assumption.
- dredmorbius 7y ago
  https://outline.com/https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-imagine-that-a-local-business-making-surgical-face-masks-is-working-247-guess-again/ https://outline.com/https://www.dallasnews.com/news/watchdog... https://web.archive.org/web/*/https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-imagine-that-a-local-business-making-surgical-face-masks-is-working-247-guess-again/ https://web.archive.org/web/*/https://www.dallasnews.com/new... https://archive.is/https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-imagine-that-a-local-business-making-surgical-face-masks-is-working-247-guess-again/ https://archive.is/https://www.dallasnews.com/news/watchdog/...
Pmop 7y ago
This is interesting. Being a Brazilian, our government has been always protectionist. Even in the current New Republic period. "Industries vital to our country must be protected". And oddly enough, that idea was shared by many politicians, even when they were opposed to each other. The govt has been harshly criticized by the recent, new libertarians, for the import taxes increased prices to the end consumer and scared away foreign investors. Turns out that we had national mask makers ready to step up. Plus, textile and other industries decided to also jump in to help. I bought three masks before taking a flight recently, I didn't have any trouble finding them, paid less than a dollar for a locally made N95 equivalent; it seems that many of my flight mates had the same idea. I guess our old politicians nailed it, at least this time.
sumo89 7y ago
That is an awful website for people in the EU. 4 different pop ups then 20 seconds after page load a final one saying you can't read the page outside the USA.
- moritonal 7y ago
  I found a bookmark a while ago that attempts to make sites like this readable. Not good at all, but almost works. "javascript:(function() { document.querySelectorAll('*').forEach(function(n) { var p = getComputedStyle(n).getPropertyValue('position'); if (p === 'fixed' || p === 'sticky') { n.style.cssText += ' ; position: absolute !important;'; } }); })();"
- aembleton 7y ago
  Just switch off JS for the site and it works perfectly well.
- mkl 7y ago
  I'm outside the USA, and read it fine. I'm guessing uBlock Origin just hid all that from me entirely.
- aivisol 7y ago
  Reader view in FF did the trick (in EU)
supernova87a 7y ago
1. Domestic production 2. Low prices 3. Surge capacity meeting sudden demand You get to choose 2 of the 3. This guy wants protectionist policies to help him stay in a more sustainable business. You can't fault him for wanting to serve his own interests. But we could've prepared for this by having the proper stockpile in anticipation of an emergency.
blunte 7y ago
Buying American doesn't increase shareholder value or executive bonuses. Reducing costs does. At least, that's the mantra Walmart became the giant it is because while people agree that supporting local businesses is important (especially when they and their neighbors own those businesses), they still could not help themselves and chose to do their shopping at Walmart because it was cheaper. Then many of the small local businesses died. Modern (American/western/and-possibly-everywhere-else) people are really terrible at balancing short vs long term priorities.
- nojvek 7y ago
  When you're living paycheck to paycheck, every dollar matters. The problem is things are cheaper from china, because China as a nation invested in their ecosystem of manufacturing. Ports, roads, tax incentives, loans e.t.c US on the other hand did not invest in themselves as heavily. It's like a rich son having someone else do his assignments and when the end of year exam comes, he's fucked because he didn't put the effort in learning himself. The more we take China take the lead and we rely on them, the more we lag behind.
thawaway1837 7y ago
I don’t really get this article. If you have the foresight, and money, to pay to transplant an entire industry from a place which manufacture masks for 2 cents as opposed to one that does it for 10 cents, wouldn’t it be a lot easier, cost efficient, and sensible, to simply by 2 masks whenever you need one for a total of 4 cents for the 2 masks, and keep 1 of those 2 masks in your stockpile? You end up spending about 4cents per mask, and you’ve built up a massive stockpile in addition to that for emergency situations. And you’ve only paid 20% of the money you would have for the masks the article is advocating. Frankly, this was a disaster in federal planning. Trying to twist this into some sort of issue with the supply chain system is kind of ridiculous. Also, if you actually look at the US right now, the idea that American companies would be manufacturing anything full throttle is beyond ridiculous. China in fact manaaged to completely lockdown Hubei province in a way the US can never dream of, which allowed them to continue their industrial manufacturing, and actually be able to supply masks to states and hospitals around the country (of course, life would be a lot easier if the federal government coordinated the procurement so states weren’t outbidding each other only to have the Federal government pirate their supplies to ha d off to private entities that then resell it to the same states for even more...).
noirchen 7y ago
I was in China in 2003 during SARS outbreak, and at that time the Chinese doctors and nurses had no N95s or KN95s. They used thick cloth masks. To get better protection, the masks were boiled in highly salty water and dried. I think this may be useful if you have to wear some homemade masks.
JoeAltmaier 7y ago
Not sure writing the feds is a way to change the free market system. Not for one guy; not on a dime. Perhaps a measure allowing emergency part-time workers? Why does he have to be 'fooled again', why not just increase production temporarily? It sounds to me, this guy is being spiteful. Wants to make a point. Maybe not the right climate to make his point in.
- zelienople 7y ago
  If you can't make the point now, when can you make it? Once the pandemic is under control, no one will care. The bottom line would appear to be that capitalism is, by far, the best system we have, but only when it operates inside a walled garden. We should impose tariffs on essential items so as to allow local employees to be paid a fair and living wage, put restrictions on the multiple between the lowest wage in a company and the highest, limit growth to preserve the competitiveness of markets, and ensure that the true cost of production, including the environmental damage associated with production, distribution, and disposal is accounted for locally. Imagine if this small business was allowed to charge a fair price for their product without competition from a totalitarian state that has bred 1.6 billion slave workers to exploit the planet and conduct a covert economic war to undermine democratic free-market countries. Imagine if the earnings of every CEO were capped at 3x the lowest wage on the factory floor. Imagine people having stable jobs that fulfill a genuine need while producing something in a sustainable and environmentally-responsible fashion. Imagine that those hard workers get health care and generous vacations and a living wage. Is it so ridiculous to dream of limited capitalism? Sane capitalism?
yellowapple 7y ago
> “Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.” This would be a good time to hire temp labor through a staffing agency; you pay a bit of a premium for that, but you also don't put the employees directly on your payroll that way (they're employees of the staffing agency instead, so said agency is then responsible for finding new work). People need the jobs, America needs masks, this guy wants to make and sell masks, win-win-win. Like, I didn't really see a compelling reason in the article why that factory isn't working 24/7. I know of plenty of companies that deal in similarly-high-demand-in-pandemics products (my employer included) that are ramping up and running 24/7 and doing everything they can to get those products to people who need them. Most of them are doing that by hiring temps.
nojvek 7y ago
It seems US is very much going for short term gratification instead of long term building of industrial nation. Moving manufacturing offshore into China and other cheaper countries + mega multinational corporations starving small businesses or buying them up so they can get away with price gorging and lobbying for favorable laws. China said no to Google and Facebook, they let Baidu and Tencent build the technological prowess. China manufactures most of the worlds electronics, they help their cities foster ecologies. e.g Shenzen, Guangzhou, Tianjin e.t.c Meanwhile US has been losing its manufacturing edge over time. We can't be price competitive to China because we haven't invested in the ecosystem necessary for mass scale production. Our governmental leaders have frequent conflict of interests because they've worked at previous mega corps. US can no longer think and take actions for the interest for the whole nation. Corporate interests are winning out. Seeing how the $2 trillion stimulus was a giant coop, to Jared Kushner (neopotism) saying "National Stockpile is for us, and not for the states." COVID-19 is exposing how incapable we are as a nation to be self sufficient. Is US a democracy? I am not so sure. Without fair competition, we aren't a capitalist society either.

332 points by smacktoward 7y ago

“If y’all don’t care about me in good times when everybody’s OK, how am I going to be there when you need me?” Hopefully this will change. We need companies like this, and we don't need to be supporting the CCP's human rights violations.

wccrawford 7y ago
It won't change. People will always act in their own interest. They're not going to pay 5x the price for masks (2c from China, 10c from this guy) if they don't have to. Who knows when this will happen again? They might pay those higher prices for 10 years (which is apparently how long it's been since last time he had to ramp up production) before it makes any difference. They likely also won't stock up on masks for financial reasons, too. It costs money to have storage space for them.
- toss1 7y ago
  ... and THIS is exactly why we need a functioning government and why government is NOT like a business In business, the main concern is optimizing product and cost. Extra inventory and capacity is considered wasteful, not adding shareholder value this quarter or this year. the govt's job is to build the infrastructure (physical, legal, technological, etc.) and ensure preparedness. Calculate the greatest plausible need, and ensure that the resources are there to meet it. That is why we pay for firehouse & firemen to, we hope, hardly ever work, pay for soldiers to, we hope, mostly shoot at targets, etc. This is why we should not be outsourcing entire supply chains, even if it is most profitable. Some second sourcing, sure, but critical manufacturing capability and intellectual property capability offshoring is just foolish.
  - akvadrako 7y ago
    This is actually an example of how the government should be run like a business. Paying 10x the amount for masks to ensure they are available when needed would have saved money in the long run.
    - toss1 7y ago
      In theory, yes. But I have almost never seen a business ACTUALLY do that, and have watched decades of management consultants actively advising AGAINST that type of management. Aside from the general issue of offshoring the production capacity and know-how (as if it were somehow fungible & low value), the JIT (Just In Time) inventory movement has also taken over the entire industry. So, instead of maintaining stockpiles of input materials with associated costs of storage space and idle capital, they spend costs to manage networks to try to ensure that it arrives "Just In Time". Great while it works, and if done properly, it can be robust to handle single supplier disasters. But, the more rare broad events like this kill everything. The MBAs might even argue that paying 10x to ensure availability isn't even economical, as the events requiring you to pay 100x don't add up to the total 10x cost. But the real issue is that no business is managed to handle the tail risk (the rare, low-likelihood events with disastrous consequenses). Any business that does manage for tail risk -especially at the level that a govt should manage for tail risk- will be outperformed by any biz that manages for normal circumstances. They will likely fail. Consider trying to setup a for-profit local fire department. You are paying $$millions for equipment and must pay skilled workers to sit around and polish the equipment almost every day. The customers and other regulators are actively working to ensure that you are never needed. When a fire does happen, and you show up and demand payment or ccard (assuming the homeowner is even present and not inside the fire), most of the time they can't pay, so you have no sale. Your fire department would go bankrupt quickly. The only solution would be for everyone in the coverage area to pay into a fund supporting your company, and get service whenever they need it. You'd need to make sure that EVERYONE paid in and there were no freeloaders. Congratulations - you've just invented government, not a business.
      - akvadrako 7y ago
- benjohnson 7y ago
  >>It costs money to have storage space for them. $40 per employee. My five-man IT company have enough PPE to keep going for 120 days. It cost us $200 a year to maintain it - or $40 per employee. We have N95, face-shields, and Tyvek bunny suits. We even have N100 half-face respirators for a really serious pathogen. EDIT: It does cost for storage. At $25 per sq-ft for real estate, it add $50 to the cost. So a total of $50 per employee. (We have prudently given a lot to the local hospital as we've been working primarily from home. We've also been 3D printing face-shields.)
  - greedo 7y ago
    Not judging, but why does a five-man IT company require PPE? I've been involved with DR/BCP for 20 years and this has never come across my radar.
    - dylz 7y ago
      California OSHA has made it a legal requirement for companies to have N95 masks for employees in the past.
      - greedo 7y ago
        Thanks! I haven't worked in CA for over 2 decades, and in the Midwest this requirement would be viewed with a jaundiced eye.
        dylz 7y ago
        A lot of people were asking WTF about Facebook, Apple, etc having tons of masks - CA pretty much had temporary mandatory "you must have enough for all of your workers" declarations during wildfires.
    - benjohnson 7y ago
      Great question! Day to day it's quite useful - I don't want to send my guys into a sketchy attic that may have glass fibers, rat turds, black mold, and asbestos to check on a network cable and I don't want them to lose and eyeball when using a power drill. We also spend a fair amount of money on ladder safety - looking at the OSHA data, that a great way to maim yourself.

mrosett 7y ago

One angle that this article missed: anti-price gouging sentiment has a lot to do with why the factory isn’t running 24/7. Imagine if he could charge 10x his normal price (ie $1/mask, which is much less than the value a mask provides.) I suspect plenty of employees would happily work 100 hour weeks for the duration of the crisis if they were getting paid $150/hr. Instead, he’s forced to take a slower, more conservative approach to ramping up to avoid risking bankruptcy.

gpm 7y ago
From one perspective this is true. From another perspective, he's having trouble getting long time contracts. Hospitals could give him that extra 90c per mask (10c per mask per the article, 1$ suggested price in your comment) by signing a contract to buy x masks every year for 10 years instead of just signing a contract to buy x masks. It seems that the actual problem might just be hospitals being stingy.
- mapgrep 7y ago
  Not an extra 90 cents per mask, an extra 8 cents per mask. “His masks may cost a dime each, but a made-in-China mask might go for two cents.” A hospital charged my friend $5k for three stitches. They could pay 8 cents more per mask. But they care more about $$$ than the long term health of the country. And I’m not even making a moral statement with that. It’s the natural consequence of making health care a capitalist endeavor. There are other approaches.
  - gpm 7y ago
    > Not an extra 90 cents per mask, an extra 8 cents per mask. We're suggesting the hospital giving him 1 dollar per mask instead of 10 cents during the crisis, that's an extra 90. 98 cents compared to the Chinese prices. I guess my proposal makes it a bit less. With the 10 year contract, assuming that the demand spike only exists in the first year, it would be an extra 90 cents - savings of (9 years * 2 cents / year) = 72 cents per mask. This could be "fixed" by extending that contract for a few more years.

burlesona 7y ago

It is shameful that the US has abandoned its manufacturing base and allowed its productive capacity to be destroyed. The pandemic exposes how weak this makes us, but I don’t know that things will change when the pandemic eventually ends. Once things calm down, I doubt people will retain the ability to see the downsides of always chasing the absolute lowest cost supplier.

deburo 7y ago
There has been a lot of discussions politically around that overall, the covid merely but harshely exposing the medical aspect. It's a space to keep an eye on after this pendimic, I wouldn't be so pessimistic about it.
philwelch 7y ago
When this is all over, we’ll have a lot of unemployed workers and a devastated service sector. It will represent an opportunity to rebuild an industrial base. During the Second World War the US not only managed economic autarky, but we had enough agricultural and industrial capacity left over to feed, arm, and equip much of the free world. We lost that through complacency and the past 40-50 years have been a series of escalating kicks in the teeth. Maybe this will be enough for things to change.
- gruez 7y ago
  >It will represent an opportunity to rebuild an industrial base. How would this work? Who is going to buy all those expensive (by asian standards) american-made goods? >We lost that through complacency AFAIK we lost it because of globalization, which caused the labor market to be flooded cheap labor from developing countries.
  - erik_seaberg 7y ago
    This. Trickle-down economics does work, but when capital has access to global markets, it trickles way, way down past our own labor pool.
  - 7y ago

Aloha 7y ago

I cannot blame him one bit, and as a small business, he cant absorb the losses from having to scale back either. I sincerely hope the lasting change from this crisis is a changing attitude towards where we build things.

54351623 7y ago

Why can't N95 mask production be completely automated so production can quickly scale with demand while also keeping costs down?

9HZZRfNlpR 7y ago
Scaling up means a lot investment but what happens when the demand goes down? You're left with debt from it and little demand. The scaling as such is not the problem here.
- 54351623 7y ago
  Scaling as in just let the machines run longer, normal hours to 24/7 or whatever is necessary, there's more room for a nuanced production if less people are involved right? For clarification I didn't mean scaling as in buying more machines, which I agree would likely require prohibitive investment. Of course keeping a few machines in the wings is probably cheaper than overtime and unemployment. [edit] I'd also like to know how difficult it would be to just switch the machine over to making cheaper, non-medical grade masks as demand changes?
  - 9HZZRfNlpR 7y ago
    It doesn't work with specialized machinery like it does with servers aka "cloud". Machines that are reliable 24/7 workhorses cost money, when the demand is down you cannot share them over the internet so others can do something useful with them. I suppose it's more realistic with cnc or 3d printing but even then it's not that simple mission, this small company wouldn't most likely try or want to be "aws but for x robots" : ) I suppose if you think about 3d printers, plastic molding, cnc, then we are slowly going to this direction.
    - 54351623 7y ago
      I didn't mean renting them out but rather switch to masks that I assume have a higher demand with lower production standards. I'd be willing to bet that you are right though and that the machines currently being used wouldn't be capable of producing much besides masks.

lazyjones 7y ago

Sad story, but if he had kept the employees and built a stockpile at a loss, he'd quickly recover those past losses and score a huge profit now. So: believe in your product and mission, pandemics do happen. A solution for the future would be be high import taxes for products of "national interest".

neltnerb 7y ago
If your creditors and landlord don't believe in your product and mission, I'm not sure how that's actionable. Small businesses aren't in a position to make big financial bets. If Goldman-Sachs wanted to stockpile masks made at 10 cents each and take on the risk of never being able to sell them, great. I cannot fathom how someone running a non-diversified business could possibly make such a choice.
- lazyjones 7y ago
  > If your creditors and landlord don't believe in your product and mission, I'm not sure how that's actionable They own their plant, as 30 seconds of research show. https://www.prestigeameritech.com/press-releases https://www.prestigeameritech.com/press-releases They've been in the business long enough and through at least one pandemic before (see below) to make this something other than a "belief" issue. Even small companies can build reserves if their business model works.
raincom 7y ago
Of course, you suggest the company to gamble. Borrow money, build a stockpile at a loss, and wait for a pandemic. What if the pandemic doesn't strike, before they file for a bankruptcy?
- lazyjones 7y ago
  Since they've already been through a pandemic once before, it's not much of a gamble. Building reserves isn't risky: Prestige Ameritech's sales have doubled in recent weeks, forcing the company to maintain a seven-days-a-week production schedule to keep up with demand. http://content.time.com/time/health/article/0,8599,1899526,00.html http://content.time.com/time/health/article/0,8599,1899526,0... (2009)

philcrocket 7y ago

Wow. Looks like he learned his lesson. On the other hand, we American consumers haven't. I'll echo what most have said here already: the moment this crisis is over, we'll be overseas trying to find the cheapest possible price. We don't care about keeping the local guy in business. We care about our margins. I'd hate to say it but what made us great, could very well be our downfall...

blackrock 7y ago
“Your margin is my opportunity.” -Jeff Bezos

titanomachy 7y ago

Seems like a good opportunity to sign 5-year supply contracts with healthcare organizations.

jdbernard 7y ago
The article doesn't give details but it sounds like that's what he tried last time and is what he trying again: Hospitals promised to stick with him afterward, but they broke their promise. And later Now, it’s only selling to U.S. hospitals. But Bowen asks hospitals to sign contracts. Who can blame him? Or as the mayor puts it, “He’ll gear back up, and he’ll produce, and they’ll probably do it to him again.” I imagine as a small business he may not have pockets deep enough to pursue legal action against hospitals that are breaking contacts.

danvoell 7y ago

Something about this story doesn’t add up. If this were 99% of the manufacturers I know, they would be operating 24/7 right now. Call every available temp agency and load that place up. The only fathomable excuse is if they can’t get enough material. The guy running this company sounds like a politician not a businessman. Edit: not sure why I’m getting downvoted. I’m serious. If this company were near me I would be asking if I could run second shift. In theory this guy is both leaving hundreds of thousands of dollars on the table per day and contributing to our country’s deficiency of equipment while trying to argue for some sort of long term agreement because he has leverage at the moment.

raincom 7y ago
Why should the company take risk to order new machines, hire employees and train them, only a few months later to reduce the manufacturing capacity? Why should he take risk? If people want it that bad, give that company 10 year contract. I support that company's decision to not take risk, as he was burned before.
- danvoell 7y ago
  I can understand the machine part, I also wouldn’t order machines or hire long term employees and would only take steps that help my immediate situation. I would hire temp workers and at a minimum be working 7 days a week. Add a pre-order field on your website.
  - deleted 7y ago
    [deleted]
beerandt 7y ago
Read the story. It's what he did in 2009 and got burned by it. Almost bankrupted him. He's learned his lesson.
- deleted 7y ago
  [deleted]

gruez 7y ago

I took a quick skim of the article and it looks like all it would take to solve this problem is for him to raise prices (clearly the current prices are below the market clearing rate) and forcing customers to pay upfront (or at least put the money in a trust or something). >“Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.” Doesn't seem to be a real issue if those extra costs are factored in >Hospitals promised to stick with him afterward, but they broke their promise. The allure of cheaper Chinese masks was too great for hospital purchasing groups to ignore. Ask for money upfront, or get it in writing and sue later.

BurningFrog 7y ago
Raising prices in a crisis is probably criminal under price gouging laws.
- mixmastamyk 7y ago
  And there was no room to raise them in quiet times either because they were already more expensive than imports.
- gruez 7y ago
  Addressed here: https://news.ycombinator.com/item?id=22789745 https://news.ycombinator.com/item?id=22789745 Also, if the situation is really dire, I'm sure the government can grant him a waiver
  - jdminhbg 7y ago
    “Probably” not illegal is a hell of a risk to take. All it takes is one prosecutor who thinks he can make his career over crushing pandemic profiteering and you’re screwed. It doesn’t even matter if you somehow win in the end.
  - austhrow743 7y ago
    The government can also place a long term order but they haven't done that either.

jmckib 7y ago

The question that this story doesn't answer (unless I missed it) is why hospitals are refusing to sign contracts right now when they are so badly in need of masks. Either that, or pay whatever price is necessary to get the factory to produce more masks without a contract. Is it lack of budget? Legal/administrative hurdles? Something else?

missedthecue 7y ago
Almost all hospitals don't make profit. They don't have the $$ to sign contracts like that for everything they need.
- lonelappde 7y ago
  They don't make corporate profit because they funnel the money to management salaries and adminstration companies.
  - greedo 7y ago
    And many operate as non-profits to shelter income.
  - missedthecue 7y ago
    Whether this is true or not doesn't change my point
x0x0 7y ago
For starters, this guy doesn't actually make the masks hospitals need. They need n95 masks; this company makes plain surgical masks.
- dwaltrip 7y ago
  Don't hospitals need both?
  - x0x0 7y ago

mike_h 7y ago

This is a red herring issue. The problem isn’t that Chinese won’t sell the US masks. It’s that the US is trying to buy too many too late. We could have spent the past decade stockpiling them. American protectionism is actually part of what created this problem: it was only this week that the Chinese KN95 standard was approved for use by the FDA.

partiallypro 7y ago
Ironically USA Today ran a piece (not opinion) about the Obama administration using the strategic stockpile for various things during his tenure, but never refilling it.
- kevingadd 7y ago
  Yeah, over the last decade+ a mixture of legislators refusing to fund the stockpile and government officials opting not to restock parts of it has left it pretty heavily depleted. When given limited resources you're going to prioritize the most important things and they ended up choosing stuff other than masks and ventilators.
- weaksauce 7y ago
  yeah I see the rationale for it being that they were developing a new mask type that would be comfortable and reusable that they could stock up on. they didn't think that the entire global infrastructure would be so overwhelmed that they couldn't procure them in time. turns out they should have known to keep a reserve of them(100m was the number they would have stocked, though 300m is needed for this particular pandemic) now obama's team didn't hoard enough indeed and he deserves a bit of blame but it's also 3 years into trump's term... at a certain point you do need to accept responsibility for your failings and not reupping that supply is a failing.
  - lonelappde 7y ago
    Considering how many billions of dollars get spent on military jets, a few million dollars for throwaway masks seems affordable.

alphabettsy 7y ago

Many voters want the government run like a business, and this is a good example of why you don’t run the government like a business.

travisporter 7y ago

>> “Create American jobs. Buy American. … It’s hot air.” This quote really got me. Being in Texas you would think people value American made.

netsharc 7y ago
It's fascinating to read this article after reading the tweets asking "why are we depending on foreign manufacturers for protective gear?!?". Well, the answer was in here, because everyone wants to buy from the cheapest supplier...
- adjkant 7y ago
  It's almost like capitalism is inherently exploitative and if you are buying American you are no longer gaining wealth for the country by exploiting those outside of it, and then have to choose to either exploit American workers or sacrifice profit! Not aimed at you, just generally this should not come as a surprise that capitalism is generally pretty hard to make work with "Buy American" sentiments in my book.

wonnage 7y ago

Another way to frame the situation: America is in dire need of surgical masks, and its top manufacturer is more interested in martyring themselves than to help out. It seems like this is what the Defense Production Act is for? It's not like GM, where invoking the act doesn't seem to speed anything along because they don't make ventilators normally, and have to spend several days retooling their factories. In this case, you have a manufacturer that has excess capacity and is simply refusing to use it. Also, how is this supposed to make people trust American manufacturers any more than the Chinese? The Chinese are actually _making_ masks at full capacity and exporting them... meanwhile, our own homegrown industries are busy navel-gazing and feeling bitter about some past slights.

smabie 7y ago
Probably because China doesn't have (or maybe enforce?) "price-gouging" laws. This 100% wouldn't be happening if we just let people charge what they want for their own property.
- wonnage 7y ago
  How does this make any sense? China is not price gouging on PPE, at least not to the point where this guy's factory pricing is competitive
  - smabie 7y ago
    We don't know how much money it takes for a Chinese factory to produce these masks. Even though they're cheaper, the prices they charge could very well be considered price-gouging under some State laws. The absolute price of an item doesn't really matter.

hkai 7y ago

Here in Hong Kong, folks have set up six mask production lines already, working round the clock to produce surgical masks. Don't know how they managed to get the equipment but kudos to them. That's because people don't hate businesses and businesspeople, and are thankful for their effort. Low-quality surgical masks here retail for 40-50 USD per box (50pcs), and there are no plans to introduce any price controls. That means that resourceful people are stimulated to abandon their family and regular jobs, and work round the clock to set up production lines, because they want to earn money. I assume in America the sentiment towards businesspeople and pricing is somewhat different.

mkl 7y ago
> Low-quality surgical masks here retail for 40-50 USD per box (50pcs) That seems weird. They're half that on AliExpress, including shipping to NZ.

ck2 7y ago

The photos on ebay and amazon of the Chinese factories making surgical masks (not N95) appear to be 99% automated. The machines in that article appear rather different. But it's not just hospitals, all of US is built on "just in time" fulfillment for decades now. That's why a government stockpile was important for emergencies, it's not unrealistic to expect government to have that role. You just can't have people in charge of government that spend all their time dismantling it and expect it not to fail.

solidsnack9000 7y ago

For clothing, the Berry Amendment ensures that the US has strategic capacity, by mandating that certain government purchases are made from suppliers that assemble US fabric with US labor. Maybe there needs to be a similar policy for medical equipment.

ardy42 7y ago
> For clothing, the Berry Amendment ensures that the US has strategic capacity, by mandating that certain government purchases are made from suppliers that assemble US fabric with US labor. Honestly, US government policy should be to buy everything that could be remotely considered strategic or useful in an emergency from US suppliers that use US labor and materials. Small exceptions could be made for proprietary things made by NATO allies, but even that stuff should really have a second source supplier located in the US.

catherd 7y ago

The mask situation in the US is truly fucked up right now. I've been finding and sending masks and other PPE to the US from China. Started out for friends and family then it expanded to friends-of-friends, then anybody. It has a really weird dynamic. I've contacted over 100 hospitals. They don't want to help themselves. It's all about pushing people into a web form that fronts a bureaucratic system that supposedly allocates resources efficiently through a central clearing authority (never heard back from any of them), covering their ass in regards to regulatory requirements, and not allowing anyone to take advantage of them by charging money. Individuals aren't much better. They've had so much conflicting information drilled into them that of the few who still think masks are needed by regular people, many feel so guilty about getting them that they can't bring themselves to do it. Or can't wear them in public because people will judge them for taking away from nurses even though the same hospitals the nurses work at have made it clear they would rather have their employees work unprotected than buy something not approved by the FDA or stoop so low as to work with someone who can't donate everything for free. Have had way better success working with retired civic-minded business guys who can buy stuff through their local civic group and just get it done. It takes a surprising amount of almost outright harassment from these dudes to get the hospitals to either accept a donation or come up with a list of what they need and arrange funding, but so far getting hooked up with this type of person has been the only way I've found to get PPE (at least the kind that's still available) into a hospital.

gamblor956 7y ago
You're definitely not calling the right hospitals. In LA, hospitals have been accepting donations of masks from people, and purchasing them from local companies. No bureaucracy involved. And it's now rare to see people not wearing masks in LA.
- edge17 7y ago
  I think he's trying to offer his supply channel to hospitals that are talking about being desperate for supplies. People keep talking about donations, but the reality is that this is a crisis of supplies, not a crisis of money. My experience matches the parent comment here.

xivzgrev 7y ago

Smart to have hospitals sign longer term contracts for supply now. Sounds like he learned his lesson last time. Also this guy sounds kind of butt hurt about buy American rheteroic. I agree but if you are charging 5x on a commodity vs china, I mean rah rah America only goes so far.

jeffdavis 7y ago

There's no way to win selling cheap but critical supplies on the spot market. If the price goes down your customers flee. If the price goes up you can't charge the higher price because that would be "gouging". So his solution is contracts. The fact that people aren't signing them shows their true intentions. What I can't quite figure out is why, during the good times, a $0.10 consumable for a $4000 operation needs to be made more efficient so badly that the only way to produce the thing is in a communist country with no environmental controls.

PhantomGremlin 7y ago
What I can't quite figure out ... That's simple to figure out, and it is not specific to hospitals. Some purchasing manager says "hmmm ... I'm paying $100,000 per year for this product. But I can buy it overseas for only $20,000". Score! At the end of the year, that purchasing manager writes a report to his manager saying something like "saved the hospital $10,000,000 by optimizing our supply chain". Or some such. How much some random operation costs doesn't factor into his decisions at all. That's not what he's being compensated for. The only way this mindset changes is if top management insists on it. But usually top management is constantly pushing to cut costs. Their bonuses depend on it.
- xemdetia 7y ago
  Yeah, this is the kind of way I considered this article. There's so many operations including medical hospitals purchasers that are trying to follow the current mantra of as little idle inventory and wastage of inventory on the shelf as possible for as cheap as possible. This makes sense for people purchasing finished goods but doesn't make as much sense for people making finished goods who may need primary material goods in quantities and timings that do not scale well in increments. It also makes no sense from a machining and tooling efficiency investment to replace a particular operation with a machine to do it 100x as fast if making 100x of the particular sub-assembly completely overwhelms the maximum capacity of the next step unless it is also improved. There's just a minimum volume cost to most finished goods below which it just costs money to do the work at all. Sure if the volumes go way up there's economy of scale at work and the fixed costs of scaling up go down so prices can be reduced in a way that doesn't affect the manufacturing business to be more competitive but there's a bottom in the other direction. You can insulate that with long term contracts from the buyers so that you can get favorable contracts with the suppliers, but when you have purchasers going quarter to quarter and saying lowest price = best value you just are playing a totally different game for a smaller manufacturer. The current model of a small American manufacturing business seems to currently reward doing the same boring product at the same boring volume so that the company will exist in 20 or 30 years by investing in specialist equipment that does one or more steps of manufacturing better than generalist equipment and creating a niche stable market for yourself as the depreciation/fixed cost of that specialist equipment per total units made approaches next to nothing.

jariel 7y ago

There is a serious problem with understanding surpluses here. Do you really care if your monthly water bill is $1 or $5? Think - if you're at $5 a month, I mean you could save 500% (!!) by going to another provider at $1! No - you don't care at all. At such a low price and vast surplus (the difference between what you pay, and what it's worth to you) - other considerations are paramount. The difference between 10 cents and 2 cents is stupid. They could be 50 cents and it would not be 'price gouging' because there's tons of surplus to go around. If we're going to talk about 'gouging' we need to talk about the entire medical system - it's just one big massive gouge. There basically needs to be a strategy of price regulation and sourcing, as simple as that. A simple rule like 'must be bought and fully sourced in the US' is easy, because it still implies a lot of competition. For some products there could be a strategic reserve, and also a strategic production capacity. Same for the entire military supply chain. It's time to re-think globalism.

jupp0r 7y ago

How long does it take to build a mask factory? Maybe we should stockpile machines that can rapidly ramp up production of millions of face masks per day in preparation for the next pandemic.

jaclaz 7y ago
> Maybe we should stockpile machines that can rapidly ramp up production of millions of face masks per day in preparation for the next pandemic. Unfortunately that is not how machinery works, you would need personnel to maintain them, and also switch them on periodically, and repair them otherwise your stockpile of machines won't work anymore in - say - three to five years of stockage. And BTW you would also need to have a huge stockage of spare parts, as in the same three to five years the current model (the machines that actually running in production) will be release/model Mark V, and they have different parts from the Mark I you have stocked ...

madaxe_again 7y ago

Article isn’t available outside of the US. I assume it’s about how everything is the greatest, and they’re working 30/8, not 24/7?

mkl 7y ago
Install uBlock Origin and try again. The article is the exact opposite of your assumption.
dredmorbius 7y ago
https://outline.com/https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-imagine-that-a-local-business-making-surgical-face-masks-is-working-247-guess-again/ https://outline.com/https://www.dallasnews.com/news/watchdog... https://web.archive.org/web/*/https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-imagine-that-a-local-business-making-surgical-face-masks-is-working-247-guess-again/ https://web.archive.org/web/*/https://www.dallasnews.com/new... https://archive.is/https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-imagine-that-a-local-business-making-surgical-face-masks-is-working-247-guess-again/ https://archive.is/https://www.dallasnews.com/news/watchdog/...

Pmop 7y ago

This is interesting. Being a Brazilian, our government has been always protectionist. Even in the current New Republic period. "Industries vital to our country must be protected". And oddly enough, that idea was shared by many politicians, even when they were opposed to each other. The govt has been harshly criticized by the recent, new libertarians, for the import taxes increased prices to the end consumer and scared away foreign investors. Turns out that we had national mask makers ready to step up. Plus, textile and other industries decided to also jump in to help. I bought three masks before taking a flight recently, I didn't have any trouble finding them, paid less than a dollar for a locally made N95 equivalent; it seems that many of my flight mates had the same idea. I guess our old politicians nailed it, at least this time.

sumo89 7y ago

That is an awful website for people in the EU. 4 different pop ups then 20 seconds after page load a final one saying you can't read the page outside the USA.

moritonal 7y ago
I found a bookmark a while ago that attempts to make sites like this readable. Not good at all, but almost works. "javascript:(function() { document.querySelectorAll('*').forEach(function(n) { var p = getComputedStyle(n).getPropertyValue('position'); if (p === 'fixed' || p === 'sticky') { n.style.cssText += ' ; position: absolute !important;'; } }); })();"
aembleton 7y ago
Just switch off JS for the site and it works perfectly well.
mkl 7y ago
I'm outside the USA, and read it fine. I'm guessing uBlock Origin just hid all that from me entirely.
aivisol 7y ago
Reader view in FF did the trick (in EU)

supernova87a 7y ago

1. Domestic production 2. Low prices 3. Surge capacity meeting sudden demand You get to choose 2 of the 3. This guy wants protectionist policies to help him stay in a more sustainable business. You can't fault him for wanting to serve his own interests. But we could've prepared for this by having the proper stockpile in anticipation of an emergency.

blunte 7y ago

Buying American doesn't increase shareholder value or executive bonuses. Reducing costs does. At least, that's the mantra Walmart became the giant it is because while people agree that supporting local businesses is important (especially when they and their neighbors own those businesses), they still could not help themselves and chose to do their shopping at Walmart because it was cheaper. Then many of the small local businesses died. Modern (American/western/and-possibly-everywhere-else) people are really terrible at balancing short vs long term priorities.

nojvek 7y ago
When you're living paycheck to paycheck, every dollar matters. The problem is things are cheaper from china, because China as a nation invested in their ecosystem of manufacturing. Ports, roads, tax incentives, loans e.t.c US on the other hand did not invest in themselves as heavily. It's like a rich son having someone else do his assignments and when the end of year exam comes, he's fucked because he didn't put the effort in learning himself. The more we take China take the lead and we rely on them, the more we lag behind.

thawaway1837 7y ago

I don’t really get this article. If you have the foresight, and money, to pay to transplant an entire industry from a place which manufacture masks for 2 cents as opposed to one that does it for 10 cents, wouldn’t it be a lot easier, cost efficient, and sensible, to simply by 2 masks whenever you need one for a total of 4 cents for the 2 masks, and keep 1 of those 2 masks in your stockpile? You end up spending about 4cents per mask, and you’ve built up a massive stockpile in addition to that for emergency situations. And you’ve only paid 20% of the money you would have for the masks the article is advocating. Frankly, this was a disaster in federal planning. Trying to twist this into some sort of issue with the supply chain system is kind of ridiculous. Also, if you actually look at the US right now, the idea that American companies would be manufacturing anything full throttle is beyond ridiculous. China in fact manaaged to completely lockdown Hubei province in a way the US can never dream of, which allowed them to continue their industrial manufacturing, and actually be able to supply masks to states and hospitals around the country (of course, life would be a lot easier if the federal government coordinated the procurement so states weren’t outbidding each other only to have the Federal government pirate their supplies to ha d off to private entities that then resell it to the same states for even more...).

noirchen 7y ago

I was in China in 2003 during SARS outbreak, and at that time the Chinese doctors and nurses had no N95s or KN95s. They used thick cloth masks. To get better protection, the masks were boiled in highly salty water and dried. I think this may be useful if you have to wear some homemade masks.

JoeAltmaier 7y ago

Not sure writing the feds is a way to change the free market system. Not for one guy; not on a dime. Perhaps a measure allowing emergency part-time workers? Why does he have to be 'fooled again', why not just increase production temporarily? It sounds to me, this guy is being spiteful. Wants to make a point. Maybe not the right climate to make his point in.

zelienople 7y ago
If you can't make the point now, when can you make it? Once the pandemic is under control, no one will care. The bottom line would appear to be that capitalism is, by far, the best system we have, but only when it operates inside a walled garden. We should impose tariffs on essential items so as to allow local employees to be paid a fair and living wage, put restrictions on the multiple between the lowest wage in a company and the highest, limit growth to preserve the competitiveness of markets, and ensure that the true cost of production, including the environmental damage associated with production, distribution, and disposal is accounted for locally. Imagine if this small business was allowed to charge a fair price for their product without competition from a totalitarian state that has bred 1.6 billion slave workers to exploit the planet and conduct a covert economic war to undermine democratic free-market countries. Imagine if the earnings of every CEO were capped at 3x the lowest wage on the factory floor. Imagine people having stable jobs that fulfill a genuine need while producing something in a sustainable and environmentally-responsible fashion. Imagine that those hard workers get health care and generous vacations and a living wage. Is it so ridiculous to dream of limited capitalism? Sane capitalism?

yellowapple 7y ago

> “Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.” This would be a good time to hire temp labor through a staffing agency; you pay a bit of a premium for that, but you also don't put the employees directly on your payroll that way (they're employees of the staffing agency instead, so said agency is then responsible for finding new work). People need the jobs, America needs masks, this guy wants to make and sell masks, win-win-win. Like, I didn't really see a compelling reason in the article why that factory isn't working 24/7. I know of plenty of companies that deal in similarly-high-demand-in-pandemics products (my employer included) that are ramping up and running 24/7 and doing everything they can to get those products to people who need them. Most of them are doing that by hiring temps.

nojvek 7y ago

It seems US is very much going for short term gratification instead of long term building of industrial nation. Moving manufacturing offshore into China and other cheaper countries + mega multinational corporations starving small businesses or buying them up so they can get away with price gorging and lobbying for favorable laws. China said no to Google and Facebook, they let Baidu and Tencent build the technological prowess. China manufactures most of the worlds electronics, they help their cities foster ecologies. e.g Shenzen, Guangzhou, Tianjin e.t.c Meanwhile US has been losing its manufacturing edge over time. We can't be price competitive to China because we haven't invested in the ecosystem necessary for mass scale production. Our governmental leaders have frequent conflict of interests because they've worked at previous mega corps. US can no longer think and take actions for the interest for the whole nation. Corporate interests are winning out. Seeing how the $2 trillion stimulus was a giant coop, to Jared Kushner (neopotism) saying "National Stockpile is for us, and not for the states." COVID-19 is exposing how incapable we are as a nation to be self sufficient. Is US a democracy? I am not so sure. Without fair competition, we aren't a capitalist society either.