At first glance, the story elicits a raised eyebrow. How can it be possible that an American manufacturer of surgical masks – America’s number one mask maker – isn’t working 24/7? The answer comes down to the fact that the owner has been there, done that in the past and got burned. He isn’t letting history repeat itself now.
Mike Bowen owns Prestige Ameritech in North Richland Hills, Texas. His company, founded in 2005, is trying to keep up with demand during the coronavirus pandemic. Bowen has been sounding the alarm for years about the dangers of America’s heavy reliance on China for medical equipment and personal protection equipment. The company is only operating daytime shifts, no nights or weekends.
The coronavirus pandemic is providing Americans with a few lessons, none starker than the dangers of relying on China as a primary provider of medical equipment and supplies, including drugs. Unfortunately, American consumers, including hospitals and medical centers, have not been willing to forego cheaper prices in exchange for supporting an American manufacturer. The surgical masks manufactured at Prestige Ameritech cost $.10 each while those manufactured in China cost $.02 each.
Now that China has cut off a large portion of sales to outside countries, the medical community is scrambling to find sources from which to purchase masks. The phone is ringing off the hook and his email inbox is full. Bowen cites a perfect storm – a bad flu season, the outbreak of a pandemic, increased needs of hospitals, panic buying, and China cutting off the supply. According to the Department of Health and Human Services, 95 percent of surgical masks are made overseas.
The demand now is unprecedented. In response, Prestige Ameritech is working 80-hour weeks, bringing idle machines online, and hiring and training dozens of new employees. This is in addition to the usual staff of about 100. Pre-pandemic, 250,000 masks were produced. Now production is up to 1 million masks a day. Even at that number, Bowen is turning down orders for up to 300 million masks some days. Bowen also made the difficult decision of only selling to hospitals, not the general public. He gives priority to medical centers willing to sign a five-year contract with him.
Here’s the reason he isn’t switching over to 24/7 production and increasing his efforts now – he did that during the H1N1 pandemic in 2009. He got burned. In order to protect his business and his workers, he is doing things differently this time around. During that pandemic, he increased production, hired more employees, and went to three shifts a day. Then the bottom fell out after the pandemic ended. He was stuck paying unemployment for all those people and had to reduce production.
The policy is rooted in history. The last time the country faced a comparable mask shortage was during the 2009 H1N1 outbreak. To meet increased demand, Prestige Ameritech hired hundreds of new employees and expanded its manufacturing capabilities. But after the outbreak died down, Bowen says that most hospitals that had relied on Prestige Ameritech went back to Chinese suppliers, which typically sell masks and respirators for less than it costs him to produce.
“In 2011, after the H1N1 pandemic ended, we had to lay off 150 people,” he recalls. “One hundred fifty people that saved a lot of hospitals from closing their doors were rewarded by losing their jobs. And that’s not going to happen again.”
So though Bowen began sounding the alarm against an overreliance on China in 2007, and his worries came to fruition by 2011, companies went back to purchasing from China. America is beholden to a Communist government for medical supplies and medicine.
“I’ve been preaching this American-made story since 2007. Nobody listened. The whole mass market was only interested in price. I’ve been everywhere trying to get people to listen. I’ve talked to congressmen. I’ve talked to generals. I’ve written the president. I wrote President Obama five or six letters, and he sent me a presidential proclamation suitable for framing.”
Bowen wants a guaranteed contract, not a proclamation. It’s tough to win a bid to supply U.S. hospitals through their group purchase agreements that seek the cheapest price when your competitor pays low wages, ignores environmental concerns and is subsidized by a Communist government.
Last month, he got another proclamation but no contract to go with it. U.S. Sen. Marco Rubio, R-Florida, named Prestige Ameritech the “Senate Small Business of the Week.” The citation notes that the company “has ramped up their daily production to 600,000 masks.”
His company could be doing much more but it can’t without some commitment from American medical facilities. Hospitals that promised to stick with him after the H1N1 pandemic didn’t because the inclination to go with cheaper pricing was too strong. It’s been a struggle at times to keep going. He hasn’t been able to secure a government contract to help keep his company going in slower times.
In 2010, the company celebrated a grand “reopening” when it renamed its factory the Global Pandemic Preparedness and Response Center. The event was attended by then-Gov. Rick Perry, who said, “It’s good news for America as America becomes competitive back in this arena again.”
But the news wasn’t so good. The next year, Bowen and company president Dan Reese had to lay off 150 workers. Bowen told Wired magazine, “150 people that saved a lot of hospitals from closing their doors were rewarded by losing their jobs. And that’s not going to happen again.”
The company nearly went bankrupt. In 2012 the company took out a million-dollar loan.
He is hiring now and trying to ramp up but it takes weeks to build new machines and train employees. He faced a new challenge recently, too, as his website was copied nearly identically under a domain name that differed from his by only one character. Now there is a fraud alert banner at the top of his website.
“I don’t know if anyone sent the money, but we definitely had people calling us, and [got] dozens and dozens of emails asking if it was real,” Bowen recalls. He quickly contacted the domain registrar for the fake site, GoDaddy, and two days later it was taken down.
Prestige Ameritech’s website now has a “Fraud Alert” banner at the top warning customers about fake sites and fraudulent sellers. Bowen says he still receives a lot of emails from concerned potential customers, but that the hardest part of adjusting to the demand surge are the messages from desperate ordinary Americans.
And, no, even now Bowen has not received an order request from the federal government, though as recently as last week Secretary of Health and Human Services Alex Azar told senators that there is still a huge need for the products Bowen manufactures.