The COVID-19 pandemic shone a well-deserved spotlight on domestic manufacturers, but cheap imports could shadow them once again.
Editor’s note: This is the seventh entry in our 10-part series examining the policies and priorities that President-elect Joe Biden should focus on as he looks to lead America out of the COVID-19 pandemic and rebuild the American economy.
When the coronavirus pandemic took hold earlier this year, American manufacturers stepped up to the plate, going to extraordinary lengths to make the supplies needed by frontline workers. Meanwhile, there was a renewed sense of appreciation for Made in America, as people saw firsthand the deadly consequences of offshoring so much of our critical production.
But now that a vaccine is being deployed and an end to the pandemic is (thankfully) on the horizon, will there be a permanent shift to Made in America, or will things quickly go back to business as usual?
We spoke with three American manufacturers to find out how they are feeling as 2020 heads to a close, what their outlook is for 2021, and what they hope President-elect Joe Biden will do once in office.
Tim Gibb, co-founder of TIDAL New York, a sustainable flip flop manufacturing company based in New Rochelle, N.Y., said he’s seen heightened interest in domestic manufacturing from consumers and the business world alike.
“I’ve heard from more people that want to manufacture in the U.S. than I ever have,” Gibb said. “Whether it’s for just overall picking of brains or actual business, we’ve never seen more interest than we are now. But all of that can be naught if the foundations aren’t set for that to actualize.”
Jake McCampbell, president and co-founder of Los Angeles-based sports equipment and apparel manufacturer StringKing, echoes Gibb’s observation that America is at a pivotal juncture.
“There’s been a resurgence in Los Angeles since the pandemic,” said McCampbell, “and a lot of that was because manufacturing became more valuable in an emergency situation, so the companies that were actually doing manufacturing seemed to get more business. It also seems like with less travel globally, companies are starting to produce more in the United States because they can’t travel globally and go visit their suppliers, so I’ve seen a lot of resurgence in Los Angeles, but it’s hard to tell if in a year that’s just going to go back.”
StringKing, like so many other U.S. manufacturers, answered the urgent call for personal protective equipment (PPE) in the L.A. area, rescuing dozens of sewing factories from closure. The company secured contracts from both Health and Human Services (HHS) and the Federal Emergency Management Agency (FEMA) to supply the national stockpile with disposable hospital gowns.
StringKing was able to employ roughly 700 workers, but all those jobs are now at risk. Though StringKing’s federal contracts were projected to yield orders for one year, HHS and FEMA have only submitted orders for the first four months.
“They kind of had us scale up from zero to our max possible output, and then immediately no more orders,” McCampbell said. “It’s almost like worst case scenario on the contract because it’s really expensive to train people and scale things up, and we kind of did at a price where we were kind of counting on some sustained business. But, I mean, it is what it is. I’m just trying to keep people employed as long as possible.”
As manufacturers navigated the current challenges of the pandemic, the burdens of managing workplace regulations and sanitation to enable operation during COVID-19 has also weighed on them.
“I think one of the things that’s most frustrating about the coronavirus and the pandemic is the lack of clarity around what we are supposed to do, as rules are imposed upon us at the state level,” said Oxford Pennant co-founder Dave Horesh. “[We need] more overall federal guidance and leadership and then [it] trickles down to states and gives us as manufacturers a much clearer understanding of what’s acceptable and what’s not, what policies should be in place within the workplace to keep people safe.”
One of the main challenges facing American manufacturers is China. Although the U.S. continues to struggle to contain COVID-19, things have been up-and-running in China for months, and imports are surging. China’s government, meanwhile, seems primed to take advantage of a weakened United States and is escalating efforts to dominate global industries.
The incoming administration will need to take steps to ensure that American manufacturers have a shot at succeeding. Along with enforcing trade laws, Biden will need to make good on his campaign promises to grow the manufacturing sector, including by investing in clean energy, rebuilding infrastructure, and strengthening Buy America preferences.
Standing up for things like Made in USA labeling and safeguarding intellectual property (IP) is also important. Horesh noted that it can be a challenge for small companies like his to get his products in front of people – and once you do, you put yourself at risk of having your IP stolen and your products made by copycats, often overseas.
“One of the things that I worry about the most, to be perfectly frank, is Amazon is notorious for simply stealing ideas from people who utilize their platform,” Horesh said. “Basically, the only route for me to reach the broadest base of customers is through Amazon, but by doing that through Amazon I ultimately forfeit my right to my data and they get access to the data. And, at a certain point, they might say we’re in the pennant industry now, and there goes Oxford Pennant.”
The pandemic has brought the need to grow America’s manufacturing capacity into sharp focus, but we risk falling back into greater and greater dependence on offshore manufacturing should we forget the lessons of COVID-19.
“You see people rushing to save their local restaurants and local businesses, and it’s like, don’t forget about that,” Gibb said. “Once you go back to work, and you’re busy, and you’re in your regular whatever that next normal is, don’t forget about your local community. Shop local always. … It has to start at the community.”
Despite the challenges, there is optimism that the U.S. could finally see the rebirth of manufacturing over the next several years.
“I think that we’re in the most fruitful spot right now that we’ve been in, arguably, since deindustrialization started in the ’70s, to reverse that trend,” Gibb said. “And I don’t see it going away because the consumers have been conditioned for almost a full year at scale to ask these questions [about supply chain transparency and sustainability] now. And I think that’s a really good thing. The question is now are we going to see policy allows that to happen.”
Hear more from TIDAL New York’s Tim Gibb on The Manufacturing Report Podcast.