Andy Warlick picked up the phone in his office one day in March. On the other end: an official from the White House.
With demand for textiles plummeting because of the pandemic, the president and CEO of Parkdale Mills, a yarn and cotton manufacturer headquartered in Gastonia, was grappling with the fallout. He’d already been forced to make the decision to shut down many of his factories across the Southeast, leaving thousands jobless.
The caller’s situation was just as dire. Dr. Peter Navarro — assistant to President Donald Trump and director of the United States Office of Trade and Manufacturing Policy — said they needed help, and fast.
“They were really asking what we could do, what our capabilities were,” Warlick said. “They needed masks.”
With that call, Warlick’s plans changed. He set to work producing desperately needed masks, gowns and swabs.
“A lot of times chaos creates opportunity, but it only creates opportunity for people willing to see it and willing to change to get it,” Warlick said.
As the pandemic shut down factories and severed supply chains, manufacturers anticipated another blow to their beleaguered industry. As demand for luxuries lessened, manufacturers had flashbacks to prior downturns. More than 330,000 manufacturing jobs in North Carolina had been eliminated between 2000 and 2010. Since the Great Recession, producers had slowly added jobs, but the industry is still a shadow of its 20th century self.
But some North Carolina manufacturers have weathered the coronavirus crisis by switching gears during the pandemic to produce much needed personal protective equipment. For some, the transition was a lifeline. For others, it felt like a duty.
“They all were very willing to jump in and help out and many of them did,” said Phil Mintz, executive director of North Carolina State University Industry Expansion Solutions. “Some for regular survival — they saw an opportunity to maintain their staff. Others just wanted to help out.”
That call to action is just a detour for some, while others are contemplating making a permanent switch. A move to return the manufacturing of masks and other medical gear to the United States could determine what some manufacturers do, though the effort may require the government to prop up these companies.
For Warlick, that White House call was perfectly timed. Before then, roughly 4,000 jobs at Parkdale Mills plants were on the chopping block. The business of producing personal protective equipment allowed Warlick to keep about 2,000 of those workers and hold off shutting down some plants.
“But not only did we want to help out, it turned out to be a blessing,” Warlick said.
An Industry Still Recovering
North Carolina’s manufacturing industry has been hit hard before, especially the textile sector.
The state was once a leader in textile manufacturing. The specialty began to wither in the mid-1990s, when new trade agreements opened up possibilities for cheaper production abroad. Hundreds of mills shuttered through the 2000s, decimating the economies of rural North Carolina towns.
The recession in 2008 struck another blow to the textile industry, along with the bulk of manufacturing in North Carolina. In some ways the textile sector continues to struggle, Mintz said.
Since the mid-1990s, more than 80% of jobs in textiles in North Carolina have been lost, according to the Federal Reserve.
So far during the pandemic, about 10% of all manufacturing jobs have been lost, though many are temporary furloughs, said John Quinterno, a labor expert with South by North Strategies.
Only time will tell how deep job losses in manufacturing will be, he said.
“The longer this lasts, the longer it takes to recover,” Quinterno said, “the greater the odds are more and more temporary layoffs become permanent.”
While manufacturers struggle with the unknowns brought on by the pandemic, they are also trying to learn from past mistakes.
Over the years, Warlick has watched businesses shrink and shutter under the weight of what he describes as U.S. manufacturing’s most daunting enemy: low-cost goods produced overseas.
Much of the United States’ textile manufacturing headed to South America and Asia for cheap labor. American manufacturers, the lifeblood of many rural communities, couldn’t compete.
“A lot of our industry has been run out of business by unfair competition … and everyone has been looking the other way,” Warlick said.
As the pandemic hit America, its government was met with a sobering reality: The country had relied almost entirely on Asia and other foreign nations for essential gear such as masks, gowns and swabs. And most of the machines to make them were also made overseas.
The federal and state government got busy, calling on American companies to reconfigure their operations to make needed medical supplies. Local associations, businesses and universities began organizing new supply chains.
Carolina Textile District, a Morganton-based association, created a supply chain out of the pent-up yearning from American manufacturers to step in and help, said Kathryn Ervin, spokeswoman with the Industrial Commons, which organized the Textile District.
The group knew there was a need. Local doctors had reached out, frustrated by their inability to get masks and gowns.
The Carolina Textile District put out a call to hundreds of manufacturers seeking interest in creating a new network to make protective gear. Nearly 200 businesses in the state responded.
After winnowing the group to 60 companies, the Textile District mapped out a workable supply chain.
The effort began as an attempt to alleviate local physician needs in the Catawba Valley region, but soon word of their success reached state officials.
The state’s Emergency Management division contracted with the Textile District to make 110,000 gowns. Week to week, the manufacturers make about 40,000 masks and gowns. Revenues reimburse labor costs, Ervin said.
“It’s really cool to see how people have stepped up in various ways,” Ervin said.
For most of the manufacturers in this chain, though, helping produce protective equipment is just a sideline, Mintz said.
“We had a call to action, and people wanted to respond to that,” Mintz said. “Many said, ‘I can help out, I can make this. … But we want to get back eventually to what we normally make.’”
A Way Forward
Others see this transition as their future. They are betting on a wake-up call for consumers to now appreciate the importance of American-made essential goods.
Jordan Schindler, CEO of Catawba County based Nufabrx, saw the writing on the wall on March 13.
It was just days after North Carolina’s governor declared a state of emergency. Schindler watched the country begin to close and wondered how his Catawba County-based medical supply company would weather the pandemic.
Nufabrx made pain-relieving socks, compression sleeves, gloves and workout clothes infused with capsaicin, CBD and even IcyHot. Schindler suspected customers would be trying to save money and likely passing over his products during the pandemic.
At the same time, Schindler heard from family members in the medical field who were desperate for protective gear. He fielded calls from investors asking if Nufabrx made masks.
He decided they could.
Three days later, Nufabrx made its first copper-infused, antimicrobial, washable mask.
After a few short weeks of production, the company was overloaded with orders, Schindler said. The production at their Asheboro plant has skyrocketed to around 100,000 a week. Nufabrx has sold over a million and a half masks, including one order of 250,000 to the federal government.
“It’s been crazy in terms of production and getting product out the door,” Schindler said.
Instead of cutting staff, he added 12 new employees.
Now, he’s looking toward a permanent pivot to masks.
“Consumer behavior has shifted,” Schindler said. “Whether it’s this crisis or flu season, we expect there will be a demand.”
American Goods at a Cost
It took the pandemic for Americans and the government to realize the country was in a precarious situation with essential products being made overseas.
With that realization, the North Carolina State Industry Expansion Solutions Office is now shepherding a movement to “reshore” production of goods in the United States, Mintz said.
While many companies are interested, most are still nervous to invest in production of protective gear because the demand could slip away as soon as prices are undercut with overseas products, he said. As China reopens from the pandemic, some manufacturers who pivoted to protective gear are already seeing consumers choose cheaper goods made abroad.
Mintz’s group is trying to alleviate those concerns with a program funded through the Coronavirus Aid, Relief, and Economic Security Act, an aid package to help companies looking at investing in long-term production of protective equipment.
North Carolina manufacturers will need more assurances, Mintz said.
That guarantee could come from the federal government in the form of purchase commitments or subsidies.
“There’s going to have to be some leadership at the national level to make the commitment that says, ‘We’re going to buy a certain amount of PPE in the states’ — just like they do with some military stuff,” Mintz said.
The aid is most important now, Mintz said, as companies making the switch to protective equipment are spending money on new equipment and labor. Companies need to know the market is out there, he said.
“If you really want this industry to grow in the States, there has to be a national commitment to buy it right now -- to just buy it no matter the price,” Mintz said. “But that takes some national support.”
Much of this control, Mintz said, rests with American consumers.
“It’s really a society-based question: Are we ready to pay higher prices for things that are made in the USA?” Mintz said.
At Parkdale Mills, Warlick is still on the fence about making a more permanent switch to masks and gowns. The company has invested in market research. But Warlick is wary of the threat of foreign producers undercutting U.S. prices, something he’s experienced before.
“We don’t know where that’s going to shake out, but one thing is for sure … we’re sleeping with one eye open,” he said.
For now, though, Warlick is committed to fulfilling the request that came from the White House several months ago — at U.S.-made prices.
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