Here's what it's like inside the Chicago-area factory aiming to end US overreliance on Asia's PPE production
Jacky Chan, Jan 01, 2022
Here's what it's like inside the Chicago-area factory aiming to end US overreliance on Asia's PPE production:
From the air, the former Caterpillar factory outside Chicago is sprawling -- the size of two dozen football fields. Once a heavy equipment plant, it's now a hive of activity making a product that has never been in higher demand: medical gloves.
The US Medical Glove Company, or USMGC, wants to turn a profit -- but also to reduce US reliance on imports of medical gloves from the Far East, especially China and Thailand, while creating American jobs that pay well beyond the minimum wage.
It's one of several US companies on the same mission: to make America more self-reliant on essential medical equipment after the coronavirus pandemic sparked a global scramble, especially for personal protective equipment, or PPE.
Inside USMGC's facility, CEO Dylan Ratigan zips around the airplane hangar-sized "bays" in a golf cart, barely able to contain his excitement or his confidence in the company he's building. The former cable news host has ambitions to produce 10 billion gloves per year, or nearing 3% of prepandemic global medical glove production capacity.
Ratigan felt compelled to act after seeing the United States desperately dependent on Asian PPE producers at the height of the pandemic, he told CNN. Amid the unprecedented demand, there were cases of price-gouging, fraud and scams. Dirty, used medical gloves even were imported to the US by the tens of millions, one CNN investigation found.
"I think bad decisions have been made in American manufacturing, specifically, for critical assets like (medical gloves)," Ratigan said. "The decision has been made to make sure that never happens again."
Prepping -- in America -- for the next pandemic
During CNN's visit in December to the USMGC factory, a newly built production line "dipped" its very first nitrile gloves -- a test to make sure the machines work and the complex nitrile chemistry is just right. Every one of the line's thousands of components are made in the United States, Ratigan said.
USMGC has a $63.6 million advance purchase order with the US government, the company announced in June. In all, the US government has contracts worth almost $700 million to invest in 11 American companies -- enough, it hopes, to produce annually in the United States the equivalent of about 5% of prepandemic global glove production, a spokesperson for the Department of Health and Human Services, or HHS, told CNN in a statement.
The pandemic exposed "how dependent the US is on foreign sources which is a vulnerability in public health emergencies," the HHS spokesperson said.
In 2020, 90% of gloves, syringes and needles used in the US were sourced from Asia alone, according to HHS. Now, Washington plans to spend $1.7 billion to spur domestic PPE production, part of $4.5 billion to help expand US manufacturing more broadly, according to HHS. The US is also investing in the domestic production of raw materials for gloves, masks, gowns, drugs, vaccines, medical test kits and other essential medical supplies.
Before the Covid-19 pandemic, there was only one company producing single-use nitrile gloves in the United States, that maker told CNN. SHOWA Group, a Japanese company, had about 125 employees at a factory in Fayette, Alabama, making about 400 million gloves annually. The production lines were old, and higher domestic costs made a box of gloves about twice the price of Asian brands, the company told CNN.
SHOWA Americas marketing director tried to convince buyers to diversify their suppliers by buying at least some American-made gloves, he said. It was a tough sell.
"We were trapped in the ever-frustrating game of being a domestic manufacturer -- but our own country won't buy our products," Gilbert LeVerne explained.
Pre-pandemic plans to modernize and expand the factory have been accelerated thanks to the surge in 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.
Meantime, a father-son start-up US Glove Supply is two months from firing up the machines at its new factory in Buffalo, New York, the company told CNN. It has no government orders or investment.
Neither does USA Gloves, a new company in suburban Houston started by former promotional product importers. CEO Zishan Momin and his partners started building their factory a year ago after finding it impossible to source gloves from abroad, he said.
Lacking any manufacturing experience, they enlisted help from foreign glove production experts, who will fire up the production lines next month. The gloves, they expect, will be a little bit more expensive than Asian brands.
"Hospitals and clinics and even end users are willing to pay that slight premium ... so that we're prepared for a future pandemic," Momin told CNN.