Many small-business owners — especially those with government contracts — celebrated Monday’s news that President Joe Biden had signed legislation to tighten the “Buy American Act.”
“Within a very short time, there’s been a much more clear message being sent and a stronger level of support,” said Marisa Fumei-Smith, president of the textile manufacturer Two One Two New York, which made apparel and knitwear but has pivoted to make personal protective equipment for local government agencies and companies.
The business has grown from 60 workers at the start of the pandemic to about 400, including subcontractors that work exclusively for Two One Two.
The act requires companies that accept federal contracts to be based fully in the U.S. and to source none of their supply chains internationally. It also raises the burden of proof for businesses to argue that sourcing products domestically is too expensive, and most important, it establishes an oversight office.
Even before the coronavirus pandemic, the industry was in crisis because of a steady decline in U.S.-based manufacturing jobs and lax standards requiring companies to produce locally. The Bureau of Labor Statistics estimates that at least 7.5 million manufacturing jobs have been lost since 1980.
“There was a moment in time when every one of your customers said if you don’t move your business to China, you’re not going to have any business with us,” said James Wyner, CEO of Shawmut Corp., a textile manufacturer with headquarters in West Bridgewater, Massachusetts, whose family has run the company for four generations. Although Shawmut has employees around the world, it falls within the federal small business classification for the textile finishing industry.
But the pandemic has exposed the vulnerability of global supply chains. Shortages of protective equipment across the country were starkly illustrated by images of nurses using trash bags as coverings. When Covid-19 struck, many textile manufacturers had the opportunity to obtain government contracts for the first time to make protective equipment.
Gabrielle Ferrara, chief operating officer of Ferrara Manufacturing of New York, had worked with the designers Ralph Lauren, Calvin Klein and Donna Karan to make tailored garments before the pandemic. When the company shifted to making masks and isolation gowns, she initially had to source materials from countries like China. “That network and those relationships didn’t exist, and quite frankly, the manufacturing lines didn’t exist,” she said.
Through the pandemic, she began to work with larger companies, like DuPont and Parkdale Mills, one of the largest cotton producers in the world, to source fabric domestically.
“It’s more than just a vendor-material relationship,” she said. “There’s a real sense of community and an excitement around Made in USA product.”
During the pandemic, having domestic supply chains has been a boon for textile manufacturers, making them eligible for new government contracts. Two One Two connected with a contractor for the Federal Emergency Management Agency through an industry contact who knew its manufacturing was completely domestic, Fumei-Smith said.
“Every component needs to be U.S.-sourced,” Fumei-Smith said about the federal grant requirements. “Your fabric, your threads, any trimmings, down to the poly bags. Any stickers, labels, cartons, pallets. Every single component.”
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. It has expanded to make isolation gowns, booties, bouffants, sleeve gaiters, aprons and patient blankets.
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-heat fabrics used to make safety clothing for the automotive and shipbuilding industries. As a client of the defense industry, the company hasn’t had the same spike in government contracts as other textile manufacturers.
“I have yet to see that kind of business come to us,” she said. “The industrial sector is still floundering.
“We bid on a multiyear contract that should have been awarded in October, and it’s been extended,” she said. The defense contracts are costly, she said, and while they are essential, many have been postponed through the pandemic.
Overall, however, Leonard is optimistic.
“This is going to be a nice little shot in the arm, to remember that we do have a lot of employees in this country that want to work, that want to make things. Let’s support them and buy the stuff that’s made here,” she said.
For Shaffiq Rahim, president of Hi-Tech Engineering, Buy American means businesses have more support to invest in quality. Hi-Tech, based in Camarillo, California, near Los Angeles, makes aerospace parts for the defense industry and commercial clients. Rahim said that when prospective clients decide to outsource projects to save money, 60 percent of the time they come back to Hi-Tech Engineering. He said they often have paid for products that don’t meet quality specifications.
Businesses also appear hopeful that Biden’s latest changes will mean more opportunities to create manufacturing jobs. Wyner, of Shawmut Corp., has been working on a contract to restock the Strategic National Stockpile with protective equipment. He has been able to employ 550 people, and he hired 100 more to help complete the project, which ends in a few weeks.
“We’re confronting the fact that when our contract runs out, those jobs are likely to go away,” he said. “We want these jobs to stay.”