First GM, Now 3M: Companies Force White House’s Hand on COVID-19 Response

The Trump administration has been scrambling to secure vital medical supplies as the COVID-19 crisis unfolds. However, without a strong organizing force at the top, individual manufacturers have been left to their own devices while states fight with each other — and FEMA — for their share. Now a familiar pattern is beginning to take shape: business leaders are stepping in to get the job done where presidential leadership has failed.

The Defense Production Act: that’s not how any of this works

Despite its warlike name and its origin at the beginning of the Korean War, the Defense Production Act is not exclusively designed as an emergency response measure. In fact, various administrations — including the Trump administration — have set the DPA in motion in order to prevent future emergencies, as a means of securing the nation’s supply chains and manufacturing capabilities.

In terms of the COVID-19 response, opportunities for preventive action are long gone. President Trump failed to invoke DPA for pandemic preparation in the year leading up to the current crisis, even though members of his own administration raised the alarm.

Even as the crisis unfolded in January of this year, the president failed to act. He finally began referring to the DPA in public appearances earlier in March, but he failed to take steps that would actually implement the legislation.

That impasse finally seemed to end in mid-March, when Trump officially declared that he would invoke the DPA to force GM to make medical equipment. However, it remains unclear what impact this presidential action actually had, as GM already had a plan well under way for pivoting into the medical supply area.

3M ramps up production…

The same pattern is spinning out now in regard to the Minnesota-based company 3M.

Like GM, 3M began planning for COVID-19 response well in advance of any directive from the president. As a diversified company with a medical supply branch, 3M was also in a position to act much earlier than GM.

On January 24, for example, the Minneapolis Star-Tribune reported that 3M had already “dramatically” increased production of its respiratory face masks at its factories in China.

The next month, on February 24, the Star-Tribune noted that 3M had extended its production ramp-up to factories elsewhere in Asia, as well as in the U.S., Europe and Latin America.

…and speaks truth to incompetence

Nevertheless, as April began the President announced that he invoked the DPA to “force 3M to step up its production of desperately needed respirator masks,” as reported by CNBC and others.

3M company had clearly set that course in motion over two months ago, so that part of the president’s order at least did no harm.

More concerning, though, was another part of the order cited by 3M. That part requested 3M to stop exporting respirators currently manufactured in the United States to Canada and Latin America.

In a public statement last week, 3M warned that there would be “significant humanitarian implications of ceasing respirator supplies to healthcare workers” in those countries.

The Trump administration would also risk exposing the U.S. to the impact of a backlash by other nations, an impact that 3M noted is already at hand.

“In addition, ceasing all export of respirators produced in the United States would likely cause other countries to retaliate and do the same, as some have already done,” 3M continued. “If that were to occur, the net number of respirators being made available to the United States would actually decrease.”

3M gives credit where it is clearly not due

That argument appears to have made an impression on the White House.

In a follow up statement earlier this week, 3M announced that it won the green light to keep on doing what it has been doing all along during this COVID-19 crisis, Defense Production Act or not.

3M CEO and Chairman Mike Roman began the statement by thanking the president and his administration “for their leadership and collaboration,” but everything else in the statement made the case that the president — and his administration — does not deserve any credit at all.

In the statement, Roman underscored what the company has been saying all along.

“Given the reality that demand for respirators outpaces supply, we are working around the clock to further expand our capacity, while prioritizing and redirecting our supplies to serve the most critical areas,” he explained.

The statement outlines a supposedly new plan that sounds just like the company’s existing plan. It describes an “agreement” with the Trump administration to import more than 166 million respirators to the U.S. from China, but that measure will not impact the company’s arrangements for exporting from the U.S. to Canada and Latin America.

In fact, it appears that 3M has emerged from the fray on the plus side. The statement implies that the stumbling block was over federal trade policies involving China, and that “the Administration is committed to working to address and remove export and regulatory restrictions to enable this plan.”

That part of the statement raises the question as to why the Trump administration did not take those enabling steps months ago, or at least several weeks ago — or even last week, for that matter.

When it comes to the COVID-19 response, just get it done

3M did not pursue the point, but the company can’t resist one last twist of the knife. The statement concluded by noting that 3M has already doubled its global output of N95 respirators since January — without presidential intervention — to 1.1 billion per year.

That figure, 3M emphasized, includes a monthly figure of 35 million respirator masks manufactured in the U.S.

In addition, 3M took note of investments and actions it has already undertaken — again, in advance of a presidential directive — to provide for another doubling of its global capacity in stages over the next 12 months.

The lesson both GM and 3M have for other companies is clear: Don’t wait around for the Trump administration to take decisive, coordinated action on COVID-19 response. Just get it done and be prepared to pay lip service when the president demands a share of the credit.

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