US Mask Makers Say They're in Danger of Going broke

Updated: Aug 18, 2021

By The Hill

This article was published in The Hill August 3, 2021. In a slight contradiction, AP News recently published an article pointing to increased sales of face masks in the U.S. as Americans worry about the surging cases of the delta variant of the coronavirus.

American face mask manufacturers are warning that they will soon go broke without government support, potentially ceding domestic mask production amid a surge in COVID-19 cases.

Private companies and state and local governments favor Chinese masks, which cost just a fraction of American-made face coverings. The lack of demand has forced mask manufacturers to lay off more than 5,000 employees, and executives say the industry won’t make it to next year unless it is thrown a lifeline.

“With the virus getting worse, and we’re not even into the cold months, we’re really worried that this industry won’t be here to help when it’s needed most,” said Brent Dillie, managing partner at Premium-PPE and chairman of the recently formed American Mask Manufacturer's Association (AMMA).

Premium-PPE, like many companies in the small U.S. mask industry, began manufacturing face coverings at the onset of the pandemic as the nation faced a mask shortage driven by China’s export restrictions. The Virginia Beach, Va., firm steadily ramped up its production to 1 million masks per day earlier this year, but it has since laid off most of its employees.

“The industry is in a situation where we are needed, there are shortages of masks, but we’re all laying off our employees and sitting on huge inventories of products that we can’t sell,” said Luis Arguello Jr., vice president of DemeTech.

DemeTech was the largest surgical mask manufacturer last year before governments stopped buying American masks. The Miami company has since laid off 1,500 workers in its mask division and built up a stockpile of nearly 200 million masks.

Mask makers are pushing the Biden administration to buy hundreds of millions of masks currently sitting in storage to bolster the Strategic National Stockpile and keep the industry alive.

Their lobbying campaign comes as the delta variant surges across the U.S. and some localities and retail stores reimpose mask mandates for vaccinated individuals. The industry is appealing to President Biden’s pledge to buy American-made products and strengthen the nation’s supply chains.

Last month, the Biden administration announced it would buy 127 million new masks for the national stockpile, which had an inventory of 424 million N95 respirators as of May. Mask makers want to see that figure increase as COVID-19 cases rise.

In a win for the industry, the draft text of the Senate’s bipartisan infrastructure bill includes a measure that requires the federal government to enter into long-term contracts with American companies to purchase personal protective equipment. It would also allow the U.S. to sell masks and other medical supplies in its strategic stockpile to public and private entities.

Still, mask manufacturers are concerned that the legislation contains exceptions similar to those in COVID-19 relief bills that allowed states to use federal funds to buy masks from foreign companies.

“In general, the federal government has been good about buying American masks,” Arguello said. “It’s the state and local governments that don’t.”

States and local governments that received huge amounts of federal COVID-19 relief have spent big on Chinese masks, including KN95 masks that have fallen short of U.S. standards. California inked a $1 billion mask contract with Chinese manufacturer BYD last year, a move that eventually won approval from federal regulators that initially blocked the sale.

The industry is stressing that Americans need access to proven, medical-grade equipment to block the delta variant, which spreads far more easily than previous strands of the virus.

Health officials, including former Food and Drug Administration Commissioner Scott Gottlieb, have echoed that sentiment.

“Quality of mask does matter, and a high quality N95 mask is going to afford you a much better level of protection, especially if you fit it and wear it properly,” Gottlieb said in an interview with CBS’s “Face the Nation” last month.

The AMMA is pushing Congress to impose stricter standards on the masks purchased by state and local governments, as well as school districts and hospitals.

The mask manufacturers’ group also lobbied the U.S. Agency for International Development (USAID) to buy masks from its members and distribute them to foreign countries to reduce the risk of a new, even more potent variant emerging.

“We’re fearful of what’s next,” Dillie said. “Every case around the world is another lottery ticket for a new variant that could be even more contagious, and we’re concerned that people aren’t choosing effective masks.”

The AMMA is seeking action from the World Trade Organization against China for subsidizing the cost of face masks, accusing the Chinese government of “freezing out foreign competitors and creating a dangerous reliance on its industry to supply the world with vital PPE.”

The industry hired Washington lobbyists for the first time this year. The AMMA paid $100,000 to LSN Partners to lobby Congress, USAID, the Pentagon and the Office of Management and Budget on mask procurement in the second quarter of 2021.

Premium-PPE dispatched three lobbying firms this year to push for legislation to require federal agencies to purchase American-made equipment.

Mask makers are underscoring their urgent need for federal relief in meetings with lawmakers and Biden officials. They say most of the industry’s companies still have the capacity to ramp up mask production, but they’re quickly running out of time and money.

“Most of the mask manufacturers have laid off employees, but the machines are there and installed,” Arguello said. “There is still time to kick it back on if we act today.”

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