By Scott McLean and Jo Shelley, CNN
From the air, the former Caterpillar factory outside Chicago is sprawling – the size of two dozen football fields. Once a heavy equipment factory, it is now a hive of activity that manufactures a product that has never been in greater demand: medical gloves.
The US Medical Glove Company, or USMGC, wants to make a profit — but also reduce the United States’ reliance on imports of medical gloves from the Far East, particularly China and Thailand, while creating American jobs that pay well in the world. above the minimum wage.
It’s one of many American companies with the same mission: to make America more self-reliant when it comes to essential medical equipment after the coronavirus pandemic sparked a global stampede, especially for personal protective equipment, or EAR.
Inside USMGC facilities, CEO Dylan Ratigan weaves around airplane hangar-sized ‘bays’ in a golf cart, barely able to contain his excitement or confidence in the business he is building. The former cable host aims to produce 10 billion gloves a year, or nearly 3% of the pre-pandemic world population medical glove production capacity.
Ratigan felt compelled to act after seeing the United States desperately dependent on Asian producers of PPE during the height of the pandemic, he told CNN. Amid the unprecedented demand, there have been instances of price gouging, fraud and scams. Dirty and used medical gloves have even been imported into the United States by the tens of millions, a CNN investigation found.
“I think bad decisions were made in American manufacturing, especially for critical assets like (medical gloves),” Ratigan said. “The decision has been made to ensure that this will never happen again.”
Preparing — in America — for the next pandemic
During CNN’s December visit to the USMGC plant, a newly built production line ‘dipped’ its first-ever nitrile gloves – a test to ensure machines work and the complex chemistry of nitrile is perfect. . Each of the line’s thousands of components is made in the United States, Ratigan said.
USMGC has an advance purchase order of $63.6 million with the US government, the company announced in June. In total, the U.S. government has contracts worth nearly $700 million to invest in 11 U.S. companies – enough, it hopes, to annually produce in the U.S. the equivalent of about 5% of global pre-pandemic glove production, spokesperson for the Ministry of Health. and Human Services, or HHS, told CNN in a statement.
The pandemic has revealed “how dependent the United States is on foreign sources, which is a vulnerability in public health emergencies,” the HHS spokesperson said.
In 2020, 90% of the gloves, syringes and needles used in the United States came from Asia alone, according to HHS. Now Washington plans to spend $1.7 billion to boost domestic PPE production, part of $4.5 billion to help expand U.S. manufacturing more broadly, according to HHS. The United States is also investing in the domestic production of raw materials for gloves, masks, gowns, drugs, vaccines, medical test kits, and other critical medical supplies.
Before the Covid-19 pandemic, there was only one company production of disposable nitrile gloves in the United States, that manufacturer told CNN. SHOWA Group, a Japanese company, had about 125 employees at a factory in Fayette, Alabama, manufacturing about 400 million gloves a year. Production lines were old and higher domestic costs made a box of gloves about twice the price of Asian brands, the company told CNN.
The marketing director for SHOWA Americas tried to convince buyers to diversify their suppliers by buying at least some gloves made in the United States, he said. It was a tough sell.
“We were trapped in the always frustrating game of being a national manufacturer – but our own country won’t buy our products,” explained Gilbert LeVerne.
Pre-pandemic plans to modernize and expand the plant were accelerated thanks to increased demand and a loan from the US government. Within about three years, the company expects to produce more than six times its current US output, he said.
In the meantime, a father-son start-up Supply of American gloves is two months away from starting machines at its new factory in Buffalo, New York, the company told CNN. It has no government orders or investments.
Neither American gloves, a new company in suburban Houston started by former importers of promotional products. CEO Zishan Momin and his partners started building their factory a year ago after finding it impossible to source the gloves overseas, he said.
Having no experience in manufacturing, they brought in overseas glove production experts, who will launch the production lines next month. The gloves, they expect, will be a bit more expensive than Asian brands.
“Hospitals and clinics and even end-users are willing to pay this slight premium…so that we are prepared for a future pandemic,” Momin told CNN.
Harnessing technology for a glove made in the USA
Malaysia produces the largest share of medical gloves in the world, followed by Thailand and China, according to the Malaysian Rubber Glove Manufacturers Association. It is almost impossible for American producers to compete with Asian factories on price. But imports often have a different cost.
US Customs and Border Protection this year suspended imports of the world’s largest producer of medical gloves — Top Glove, Malaysia — on forced labor charges. Imports only recently resumed after the company paid millions in back wages to its workers to address the agency’s concerns.
Ratigan insists he can compete on price while following U.S. laws and running an ethical workplace.
“The reason I can do this is that technology allows me to do this in a way that allows me to compete with even the dirtiest user of slave labor,” he said.
The key, Ratigan said, is a virtually fully automated process: A giant machine equipped with thousands of hand-held molds dips into a chemical mixture at precise heat, then pulls off the resulting gloves at just the right time.
“You could never have done this 30 years ago because the technology didn’t exist,” he said.
Gesturing to his production line, Ratigan points to what he calls “a simple widget” – his shorthand for most anything that could be made in the United States by well-paid labor.
“There are hundreds of these widgets that should be made here and could be made here in a way that provides a minimum wage of $50,000 a year, full benefits…no forced labor, no abuse and all in creating profitable businesses,” he said.
The USMGC’s minimum wage is $25 an hour, plus health care coverage and benefits — and there are plans to provide free onsite child care, Ratigan said.
“If you treat people as valuable, you always make money,” he said.
Demand-driven flexibility is key, says expert
The pandemic has proven that the United States’ overreliance on Asia for medical supplies is “very high risk,” said Prashant Yadav, health supply chain expert at the Center for Global Development. from Washington.
The success of U.S. glove makers hinges on their degree of automation and enough flexibility to scale production up or down based on demand, he told CNN.
It also depends on how long shoppers remember the desperate race to secure PPE, Yadav said, “Or is it just a very short-term memory, and soon people will go back to wondering ‘who’s my cheapest supplier? “”
In the long term, the U.S. government should help domestic PPE producers by negotiating trade deals that guarantee comparable wages in Asian factories — rather than subsidizing U.S. companies, he said.
“Once the largest set of suppliers exporting to the United States raises their standards, both in quality and ethics, then everyone in the market is obligated to raise theirs,” he said. he declared.
Momin and Ratigan agree.
“The U.S. government must be brave and step up and, at the very least, institute the necessary tariffs to punish those who use slaves who produce counterfeit items, including medical gloves, and allow U.S. competitors, like us, to compete. at a playground level,” Ratigan said.
But once its factory and others are up and running, the US shouldn’t be so vulnerable in PPE supplies – if and when the next pandemic bursts.
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Tim Lister, Florence Davey-Attlee, Darren Bull, Luke Wolagiewicz, Gary Levens, Dougla Burns, Nick Young and David Lynch contributed to this story.