The dozens of startups that increased domestic mask production at the height of the COVID-19 pandemic are struggling to stay afloat days after the federal mask mandate for transportation was lifted.
On the brink of collapse, many small domestic manufacturers are pointing the finger at the federal government for their woes, accusing it of taking up policies in the early days of the pandemic that actively harmed their businesses, such as restrictions on advertising personal protective equipment and dubious government contracts on masks.
“I would say this removal of the mask mandates, even when [the Centers for Disease Control and Prevention] strongly suggests them, it’s kind of just another emotional blow to the industry that stood up because it was asked to by the federal government and country as a whole,” Luis Arguello Jr., the president of the Miami-based DemeTECH, told the Washington Examiner. “So you’ll find the majority of us manufacturers are just shutting down. Most have already, but this is kind of the last straw.”
NO MORE MASKS ON PLANES, TRAINS, AND BUSES — FOR NOW
Roughly 7,000 jobs in the domestic mask market industry have been lost in the past year, Nicholas Smit, the executive director of the American Mask Manufacturer’s Association, estimates. At one point, the AMMA, which formed during the pandemic to represent small producers, had about 50 members, but roughly half of them have since gone out of business, according to Smit. Most of the remaining companies have substantially decreased their output and labor force.
“I’d say we might have five to 10 left in six months,” Smit told the Washington Examiner. “We’ve already lost about half the domestic mass manufacturers, and about half that remain, if not more, are going to be going under within the next two to four months.”
The pandemic propelled the demand for face masks into a massive boom that is now on the brink of collapse. While there remains some demand for masks, smaller manufacturers have struggled to advertise their products due to restrictions imposed during the early days of the pandemic, when the United States faced massive shortages of protective gear. At the time, health officials such as Dr. Anthony Fauci implored the public not to use face masks for fear it could drain the supply for medical professionals.
“The government was afraid people would take away supply from healthcare. So Facebook, Google, and others put in a ban so people cannot even advertise that they had PPE or their company or anything like that,” Smit said. “There’s still demand, and people are saying they are desperate for masks. But all the companies ended up going to just [multinational corporation] 3M because people don’t know they’re around.”
BIDEN AND DEMOCRATS PINNED BY IMPOSSIBLE MASK MANDATE DILEMMA
AMMA has pushed the Biden administration to adjust the residual rules restricting PPE, but the measures are largely “still in place,” Smit said. Some companies like Facebook have softened their bans and allowed “legitimate businesses” to advertise medical-grade masks such as N-95s, but Smit says small businesses continue to face heavy barriers to issue advertisements.
As a result, major hospitals and retail firms have often opted to purchase masks from foreign sources, sometimes rife with counterfeits, seemingly unaware of the dozens of small domestic producers that have millions of masks to sell.
One of the toughest competitors domestic producers have faced has been the government, John Bielamowicz, a co-founder of the Texas-based United States Mask, told the Washington Examiner.
“We did not expect that to compete with free,” Bielamowicz said, referencing the White House’s January decision to distribute millions of high-quality masks at no cost. “I saw one yesterday, just a basket of free N95s, provided by Health and Human Services. And so our question is, ‘Where is our cut?’ … We’re essentially on the cusp of being run out of business by our own government.”The government has purchased millions of masks throughout the course of the pandemic and distributed many of them to the public for free. But many well-connected and legacy mask manufacturers such as 3M and Honeywell have gobbled up most of those contracts, leaving the little guys behind, Bielamowicz, who co-founded United States Mask alongside David Baillargeon in 2020, said.
DemeTECH received some government contracts during the Trump administration when the pandemic was fresh, but contracts from the Biden administration have been much more limited, according to Arguello.
Competition from abroad that battered mask producers prior to the pandemic is also mangling small mask producers. Even big domestic mask companies have relied on offshore operations to lower prices. United States Mask, for example, pays its workers a minimum of $15 an hour and sources its raw materials from the U.S. Companies in China are often able to undercut this by relying on cheaper labor or government subsidies.
“Industrial and hospital users are going right back to the lowest cost,” Baillargeon told the Washington Examiner. “They are going right back to their old habits. Government is picking winners and losers, and we’re going to be the proverbial baby with the bathwater, along with a handful of other people who don’t spend millions of dollars on lobbying each year.”
United States Mask’s sales spiked briefly in the days after the mandate was lifted, but business has been difficult in recent months, Baillargeon and Bielamowicz said. The two remain hopeful they can stay afloat due to medical facilities’ demand for certified N95s, which have been the company’s main focus.
While DemeTECH has been forced to scale down its mask production operations dramatically, the company was able to shift accordingly within the facility because the family-owned company produces a range of medical products, Arguello Jr. said.
“We’ve been making medical devices for decades. So we’re not new to this. And we’ve been able to leverage the other products that we make to move people around,” he said. “But many of the other companies in the industry are not that lucky. They just simply shut down and stop producing.”
This past week, a federal judge in Florida struck down a federal mandate requiring passengers to wear face masks on public transportation such as airplanes, dealing a blow to one of the largest COVID-19 mask mandates. After a day of confusion about the Biden administration’s plans, the Department of Justice signaled it plans to appeal the ruling but refrained from pursuing a stay, enabling it to remain in effect for now.
The daily average of new COVID-19 cases in the U.S. reached 44,308 on Friday, marking a slight increase throughout the week, according to the Centers for Disease Control and Prevention.