Many small business owners – especially those with government contracts – celebrated Monday’s news that President Joe Biden signed legislation to tighten the “American Purchasing Law”.
“In a very short time, there was a much clearer message being sent and a stronger level of support,” said Marisa Fumei-Smith, president of textile manufacturer Two One Two New York, which made clothes and knitwear, but turned to making personal protective equipment for local government agencies and companies.
The business grew from 60 workers at the start of the pandemic to around 400, including subcontractors who work exclusively for Two One Two.
The law requires companies that accept federal contracts to be headquartered in the United States and not supply any of their supply chains internationally. It also increases the burden of proof for companies to argue that domestic supply of products is very expensive and, most importantly, establishes a supervisory office.
Times of despair
Even before the coronavirus pandemic, the industry was in crisis because of a steady decline in manufacturing jobs in the United States and loose standards that required companies to produce locally. The Bureau of Labor Statistics estimates that at least 7.5 million jobs in the industry have been lost since 1980.
“There was a time when each of your customers said that if you don’t move your company to China, you won’t have any business with us,” said James Wyner, CEO of Shawmut Corp. manufacturer based in West Bridgewater, Massachusetts, whose family has run the company for four generations. Although Shawmut has employees worldwide, it falls under the federal classification of small businesses for the textile finishing industry.
But the pandemic exposed the vulnerability of global supply chains. The scarcity of protective equipment across the country was clearly illustrated by images of nurses using garbage bags as covers. When Covid-19 went into operation, many textile manufacturers had the opportunity to obtain government contracts for the first time to manufacture protective equipment.
Gabrielle Ferrara, chief operating officer at Ferrara Manufacturing in New York, worked with designers Ralph Lauren, Calvin Klein and Donna Karan to make bespoke clothing before the pandemic. When the company started making masks and insulation gowns, it initially had to purchase materials from countries like China. “This network and these relationships did not exist and, frankly, the manufacturing lines did not exist,” she said.
During the pandemic, she started working with larger companies, such as DuPont and Parkdale Mills, one of the largest cotton producers in the world, to purchase fabrics domestically.
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“It is more than just a supplier-material relationship,” she said. “There is a real sense of community and enthusiasm for the Made in USA product.”
During the pandemic, having domestic supply chains was a boon for textile manufacturers, making them eligible for new government contracts. Two One Two connected with a Federal Emergency Management Agency contractor through an industry contact who knew their manufacturing was entirely domestic, said Fumei-Smith.
“Each component must be of American origin,” said Fumei-Smith of federal grant requirements. “Your fabric, your lines, any embellishments, even the poly bags. Any stickers, labels, cardboard boxes, pallets. All the components.”
In the first 10 weeks of the pandemic, the company shipped 5 million masks. Protective equipment has become a permanent division of the business, she said. She expanded to make insulation gowns, boots, buffets, sleeve gaiters, aprons and patient blankets.
Cautious optimism
Some textile manufacturers are still concerned that Biden’s attempts to improve conditions for U.S. manufacturers may not be enough to save them.
Kathie Leonard, CEO of Auburn Manufacturing in Mechanic Falls, Maine, oversees the production of high-temperature fabrics used to make safety clothing for the automotive and shipbuilding industries. As a customer of the defense industry, the company did not have the same spike in government contracts as other textile manufacturers.
“I have yet to see this kind of business reach us,” she said. “The industrial sector is still in difficulties.
“We made a bid for a multi-year contract that should have been awarded in October and has been extended,” she said. Defense contracts are expensive, she said, and while essential, many have been delayed due to the pandemic.
Overall, however, Leonard is optimistic.
“This is going to be a good boost of spirit, remembering that we have a lot of employees in this country who want to work, who want to do things. We will support them and buy the things that are done here,” she said.
Promising prospects
For Shaffiq Rahim, president of Hi-Tech Engineering, Buy American means that companies have more support to invest in quality. Hi-Tech, based in Camarillo, California, near Los Angeles, manufactures aerospace parts for the defense industry and commercial customers. Rahim said that when potential customers decide to outsource projects to save money, 60% of the time they go back to Hi-Tech Engineering. He said they often pay for products that do not meet quality specifications.
The companies also look hopeful that the latest Biden changes will mean more opportunities to create jobs in the industry. Wyner of Shawmut Corp. is working on a contract to replenish the National Strategic Stock with protective equipment. He managed to employ 550 people and hired another 100 to help complete the project, which ends in a few weeks.
“We are facing the fact that when our contract runs out, those jobs are likely to disappear,” he said. “We want these jobs to stay.”