4 ms·

Probably related to the tricks pulled cancelling the order for 30000 ventilators for $650000000 from Philips. ( https://www.bloomberg.com/news/articles/2020-08-

Probably related to the tricks pulled cancelling the order for 30000 ventilators for $650000000 from Philips. ( https://www.bloomberg.com/news/articles/2020-08-31/philips-cuts-outlook-after-u-s-slashes-ventilator-contract https://www.bloomberg.com/news/articles/2020-08-31/philips-c... ) If you’re not a reliable partner how can you expect people to invest? If someone builds a factory in the US, as soon as masks are available from China again the administration will just drop them like a rock and start ordering from China for rock bottom prices again.

lotsofpulp 6y ago
The leadership in this administration has a many decades long history of screwing over and stealing from their “partners”.
- ciarannolan 6y ago
  And going back on previous agreements. No wonder no one trusts or wants to work with them.
WrtCdEvrydy 6y ago
I mean, this was the story from the guy in America who was selling the masks. He said he wasn't expanding or making his people pull overtime only for hospitals to go to China. How much was the cost difference? 10 cents versus 4 cents per mask.
- notyourday 6y ago
  I'm genuinely curious when was the last time someone voluntarily and constantly paid 250% of a cost of an equivalent product available from somewhere else?
  - klodolph 6y ago
    US government does strategic planning when they make large purchases. There are also a bunch of weird laws at play, so at times you might on one hand say that "the law requires" and on the other hand consider it voluntarily paying more, because it's the US government passing laws to restrict how its own purchases are made. You also might pay $5 for a hot dog at a stadium when you can buy them for $1 outside, so there's that.
    - rovr138 6y ago
      Popcorn or anything from the concessions at the movies.
    - notyourday 6y ago
      > You also might pay $5 for a hot dog at a stadium when you can buy them for $1 outside, so there's that. Is that why the concession sales at the stadiums are hurting?
  - endogui 6y ago
    What is the value of a life-saving commodity? How much would you pay for 2-year mask features in March 2020?
    - notyourday 6y ago
      $0.00 because even though the news has been telling me there were no N95 masks anywhere there were tons of them in NYC. They were just not at the "approved vendors".
      - nucleardog 6y ago
        When the market's been flooded by Chinese masks purporting to be N95 but do not actually meet the N95 specification... is sticking to a trusted supply chain really that foolish for situations where you really need the product to perform?
        notyourday 6y ago
        There was absolutely no guarantees that the masks sold via authorized vendors met any of those specifications. The authorized vendors simply happened to be entities that jumped through the ridiculous hoops established by the different procurement organizations to qualify a vendor. NYC had street vendors selling legitimate masks bought for example via supplier that normally would be selling to Home Depot, except home depot decided to do its patriotic duty ( i was amazed when they announced it ) and stopped selling N95 masks all together. For example this is the stuff from a qualified vendor today: https://nypost.com/2020/09/12/principals-rip-nyc-doe-for-supplying-cheap-crap-low-quality-ppe/ https://nypost.com/2020/09/12/principals-rip-nyc-doe-for-sup...
  - yourapostasy 6y ago
    n=1 case here. When it comes to life-critical goods and supplies, I'll pay that premium and more. Globalization-sourced 3-ton jack stand is about $30. From US Jack Company, way more than 250% of that. If there was accountability and an actual, real probability of collecting on judgements internationally, I'd have no problem with globalization. The reality is unless you are a deep-pocketed (absolute minimum 7th exponent club) actor, odds of actually getting all the way through the other side of collections are less than slim. It's still bad odds when sourcing with an "isolationist" bias, but you can knock a couple exponents off, and I'll take order of magnitude differentials all day long. If there was a way to secure non-gamed reviews, then I'd be much more open to globalization-produced goods, but I haven't found that yet. My current rough proxy for quality is to source commercial-rated duty cycle goods if they are available, research on trades discussion forums for discussion about the manufacturer, and work up an evaluation from there. But that's really time-consuming. No way do I now "trust the market" to shake out shady players.
    - SpelingBeeChamp 6y ago
      7th exponent club?
      - yourapostasy 6y ago
        $10^7, rich enough to bankroll $10 million on a serious enough lawsuit project to have a reasonable chance of actually collecting upon.
  - WrtCdEvrydy 6y ago
    I don't fault the guy, I'd basically be like "Sure, how many do you want per month? 5 year contract, early termination = full payment" If you want to "save money", then go ask the Chinese factories to sell you the masks now.
    - notyourday 6y ago
      His cost is simply too high. If he had the masks already produced when the states were willing to pay $0.30 per mask he would have made out like a bandit but he did not have them.
  - deleted 6y ago
    [deleted]
- Element_ 6y ago
  Yes that factory is located in Dallas: 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://www.dallasnews.com/news/watchdog/2020/04/03/if-you-i...
- ardy42 6y ago
  > I mean, this was the story from the guy in America who was selling the masks. Here's the link: > This is a cycle familiar to Bowen. During what he calls "peacetime," when there are no outbreaks, there are few buyers of masks. During an epidemic, there's suddenly limitless demand. > "Imagine if, all at once, millions of people wanted to skateboard," Bowen says. "The skateboarding industry is not set up for spikes like that, and neither is the mask-making industry." > Prestige Ameritech, for example, owns a limited number of machines that assemble, sew and shape the masks. A decade ago, it ramped up production in response to the swine flu outbreak by buying more machines and hiring 150 new workers. > "We made a really big mistake," Bowen says of that decision. It took about four months to build the new machines, which are as long as a school bus and cost as much as $1 million. > By the time they were ready, the swine flu crisis had ended, demand vaporized, and Prestige Ameritech almost went bankrupt. "One day — and it is literally almost like one day — it just quits. The demand is over, the phones stop ringing," Bowen says. > To make matters worse, the hospitals and medical supply companies suddenly had a glut of masks; they stopped buying for months.
crisdux 6y ago
What do you expect the US government to do in this situation? The ventilators are not needed. The US Strategic National Stockpile does not need more ventilators. Theses weren't "tricks". These contracts were poorly negotiated based on a crazed delusion we would need them. Even Dem reps have spoken out about these contracts.
- tinus_hn 6y ago
  If the contracts are bad they shouldn’t have signed them. If you make a habit of just going back on your promise when it suits you, what is your word worth? Nothing.
  - murgindrag 6y ago
    That's not how contracts in business work. It's not a promise. It's a legal contract. In business, you're allowed to break contracts, and there is no moral harm. Rather, there are damages. If I promise to buy a car from you for $100,000, and you spend $10,000 to make it, and I discover I don't need the car anymore, in most cases, I can walk away paying you $10,000. If you continued doing unneeded work, that'd be bad economics. If you could rake me over the coals and ask to me to pay $50k, that'd be exploitative. In most cases, the outcome of a broken contract is that I try to set things right for you by either: * Paying you costs incurred * Paying you expected profits * Or similar. Courts calculate damages by a range of formulas, which then sets standards for how business is conducted, and in most cases, people don't go to court but just agree to pay damages. This is foreign to how most people think about agreements; it's a very different culture. But if you talk to lawyers or executives, that's how they reason about contracts.
  - crisdux 6y ago
    To be blunt, that perspective is misguided and unrealistic. I assume these contracts allowed for a partial termination, this isn't uncommon. There is no indication these were broken unlawfully. In the case with Phillips, they already delivered 1/4th of the ventilators, there are reports all over the place stating that these were overpaid for. Of course the government overpaid for these. They were in a situation were they had to. Phillips even made indications in their earnings reports that these are contributing significant profit. These manufacturers would not hesitate to enter one of these contracts again in the future.
propogandist 6y ago
There was an oversupply of ventilators after the initial panic and hysteria in the media with the likes of NY and other states not using what was available to them. The ventilator order was placed in April, which was the peak of the hysteria. You're suggesting the government should spend $650 Million in tax payer money for something that is unnecessary and comparing it to the mask shortage? You're comparing apples and oranges trying to push your orange man bad narrative unncecessarily. 3M and a few other companies produce N95 masks stateside. >>On Jan. 30, the last day for which data is available, China managed to import 20 million respirators and surgical masks in just 24 hours. Through February, civic-minded entrepreneurs and aid groups visited pharmacies in affluent countries and emerging markets alike, buying masks in bulk to send to China. https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html https://www.nytimes.com/2020/03/13/business/masks-china-coro...
- jschwartzi 6y ago
  We promised our supplier that we would buy 30,000 ventilators. I don't know what the actual contract said but if I started ramping production in consideration of a $650 million order and my client canceled the order I would certainly try to recover some damages from them.
  - propogandist 6y ago
    These were opportunistic money grab operations from for-profit companies. What's been linked is a business article which primarily includes a statement where the CEO of the for-profit company is quoted to simply say >“It’s very unusual to have a contract like this canceled,” noting that Philips reducing their FY profit outlook as a result, to help investors make an decision on their investments. It's also very unusual for the government to give a company $650M dollar contract so quickly. It's obvious they wanted Philips, who was clearly perceived to be a leader in the space, to ramp up supply expecting a massive surge demand, which did not materialize. A business decision was made to cut the contract that was no longer needed. You're welcome to try and go against the client to recover "damages" and risk future contracts from said client.

lotsofpulp 6y ago

The leadership in this administration has a many decades long history of screwing over and stealing from their “partners”.

ciarannolan 6y ago
And going back on previous agreements. No wonder no one trusts or wants to work with them.

WrtCdEvrydy 6y ago

I mean, this was the story from the guy in America who was selling the masks. He said he wasn't expanding or making his people pull overtime only for hospitals to go to China. How much was the cost difference? 10 cents versus 4 cents per mask.

notyourday 6y ago
I'm genuinely curious when was the last time someone voluntarily and constantly paid 250% of a cost of an equivalent product available from somewhere else?
- klodolph 6y ago
  US government does strategic planning when they make large purchases. There are also a bunch of weird laws at play, so at times you might on one hand say that "the law requires" and on the other hand consider it voluntarily paying more, because it's the US government passing laws to restrict how its own purchases are made. You also might pay $5 for a hot dog at a stadium when you can buy them for $1 outside, so there's that.
  - rovr138 6y ago
    Popcorn or anything from the concessions at the movies.
  - notyourday 6y ago
    > You also might pay $5 for a hot dog at a stadium when you can buy them for $1 outside, so there's that. Is that why the concession sales at the stadiums are hurting?
- endogui 6y ago
  What is the value of a life-saving commodity? How much would you pay for 2-year mask features in March 2020?
  - notyourday 6y ago
    $0.00 because even though the news has been telling me there were no N95 masks anywhere there were tons of them in NYC. They were just not at the "approved vendors".
    - nucleardog 6y ago
      When the market's been flooded by Chinese masks purporting to be N95 but do not actually meet the N95 specification... is sticking to a trusted supply chain really that foolish for situations where you really need the product to perform?
      - notyourday 6y ago
        There was absolutely no guarantees that the masks sold via authorized vendors met any of those specifications. The authorized vendors simply happened to be entities that jumped through the ridiculous hoops established by the different procurement organizations to qualify a vendor. NYC had street vendors selling legitimate masks bought for example via supplier that normally would be selling to Home Depot, except home depot decided to do its patriotic duty ( i was amazed when they announced it ) and stopped selling N95 masks all together. For example this is the stuff from a qualified vendor today: https://nypost.com/2020/09/12/principals-rip-nyc-doe-for-supplying-cheap-crap-low-quality-ppe/ https://nypost.com/2020/09/12/principals-rip-nyc-doe-for-sup...
- yourapostasy 6y ago
  n=1 case here. When it comes to life-critical goods and supplies, I'll pay that premium and more. Globalization-sourced 3-ton jack stand is about $30. From US Jack Company, way more than 250% of that. If there was accountability and an actual, real probability of collecting on judgements internationally, I'd have no problem with globalization. The reality is unless you are a deep-pocketed (absolute minimum 7th exponent club) actor, odds of actually getting all the way through the other side of collections are less than slim. It's still bad odds when sourcing with an "isolationist" bias, but you can knock a couple exponents off, and I'll take order of magnitude differentials all day long. If there was a way to secure non-gamed reviews, then I'd be much more open to globalization-produced goods, but I haven't found that yet. My current rough proxy for quality is to source commercial-rated duty cycle goods if they are available, research on trades discussion forums for discussion about the manufacturer, and work up an evaluation from there. But that's really time-consuming. No way do I now "trust the market" to shake out shady players.
  - SpelingBeeChamp 6y ago
    7th exponent club?
    - yourapostasy 6y ago
      $10^7, rich enough to bankroll $10 million on a serious enough lawsuit project to have a reasonable chance of actually collecting upon.
- WrtCdEvrydy 6y ago
  I don't fault the guy, I'd basically be like "Sure, how many do you want per month? 5 year contract, early termination = full payment" If you want to "save money", then go ask the Chinese factories to sell you the masks now.
  - notyourday 6y ago
    His cost is simply too high. If he had the masks already produced when the states were willing to pay $0.30 per mask he would have made out like a bandit but he did not have them.
- deleted 6y ago
  [deleted]
Element_ 6y ago
Yes that factory is located in Dallas: 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://www.dallasnews.com/news/watchdog/2020/04/03/if-you-i...
ardy42 6y ago
> I mean, this was the story from the guy in America who was selling the masks. Here's the link: > This is a cycle familiar to Bowen. During what he calls "peacetime," when there are no outbreaks, there are few buyers of masks. During an epidemic, there's suddenly limitless demand. > "Imagine if, all at once, millions of people wanted to skateboard," Bowen says. "The skateboarding industry is not set up for spikes like that, and neither is the mask-making industry." > Prestige Ameritech, for example, owns a limited number of machines that assemble, sew and shape the masks. A decade ago, it ramped up production in response to the swine flu outbreak by buying more machines and hiring 150 new workers. > "We made a really big mistake," Bowen says of that decision. It took about four months to build the new machines, which are as long as a school bus and cost as much as $1 million. > By the time they were ready, the swine flu crisis had ended, demand vaporized, and Prestige Ameritech almost went bankrupt. "One day — and it is literally almost like one day — it just quits. The demand is over, the phones stop ringing," Bowen says. > To make matters worse, the hospitals and medical supply companies suddenly had a glut of masks; they stopped buying for months.

crisdux 6y ago

What do you expect the US government to do in this situation? The ventilators are not needed. The US Strategic National Stockpile does not need more ventilators. Theses weren't "tricks". These contracts were poorly negotiated based on a crazed delusion we would need them. Even Dem reps have spoken out about these contracts.

tinus_hn 6y ago
If the contracts are bad they shouldn’t have signed them. If you make a habit of just going back on your promise when it suits you, what is your word worth? Nothing.
- murgindrag 6y ago
  That's not how contracts in business work. It's not a promise. It's a legal contract. In business, you're allowed to break contracts, and there is no moral harm. Rather, there are damages. If I promise to buy a car from you for $100,000, and you spend $10,000 to make it, and I discover I don't need the car anymore, in most cases, I can walk away paying you $10,000. If you continued doing unneeded work, that'd be bad economics. If you could rake me over the coals and ask to me to pay $50k, that'd be exploitative. In most cases, the outcome of a broken contract is that I try to set things right for you by either: * Paying you costs incurred * Paying you expected profits * Or similar. Courts calculate damages by a range of formulas, which then sets standards for how business is conducted, and in most cases, people don't go to court but just agree to pay damages. This is foreign to how most people think about agreements; it's a very different culture. But if you talk to lawyers or executives, that's how they reason about contracts.
- crisdux 6y ago
  To be blunt, that perspective is misguided and unrealistic. I assume these contracts allowed for a partial termination, this isn't uncommon. There is no indication these were broken unlawfully. In the case with Phillips, they already delivered 1/4th of the ventilators, there are reports all over the place stating that these were overpaid for. Of course the government overpaid for these. They were in a situation were they had to. Phillips even made indications in their earnings reports that these are contributing significant profit. These manufacturers would not hesitate to enter one of these contracts again in the future.

propogandist 6y ago

There was an oversupply of ventilators after the initial panic and hysteria in the media with the likes of NY and other states not using what was available to them. The ventilator order was placed in April, which was the peak of the hysteria. You're suggesting the government should spend $650 Million in tax payer money for something that is unnecessary and comparing it to the mask shortage? You're comparing apples and oranges trying to push your orange man bad narrative unncecessarily. 3M and a few other companies produce N95 masks stateside. >>On Jan. 30, the last day for which data is available, China managed to import 20 million respirators and surgical masks in just 24 hours. Through February, civic-minded entrepreneurs and aid groups visited pharmacies in affluent countries and emerging markets alike, buying masks in bulk to send to China. https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html https://www.nytimes.com/2020/03/13/business/masks-china-coro...

jschwartzi 6y ago
We promised our supplier that we would buy 30,000 ventilators. I don't know what the actual contract said but if I started ramping production in consideration of a $650 million order and my client canceled the order I would certainly try to recover some damages from them.
- propogandist 6y ago
  These were opportunistic money grab operations from for-profit companies. What's been linked is a business article which primarily includes a statement where the CEO of the for-profit company is quoted to simply say >“It’s very unusual to have a contract like this canceled,” noting that Philips reducing their FY profit outlook as a result, to help investors make an decision on their investments. It's also very unusual for the government to give a company $650M dollar contract so quickly. It's obvious they wanted Philips, who was clearly perceived to be a leader in the space, to ramp up supply expecting a massive surge demand, which did not materialize. A business decision was made to cut the contract that was no longer needed. You're welcome to try and go against the client to recover "damages" and risk future contracts from said client.