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How the pandemic is reshaping American manufacturing

Long before the coronavirus pandemic, manufacturing in the U.S. was transformed -- and with it, daily life. Now COVID-19 is delivering a new blow to the industry. But some companies are pivoting to create the personal protective equipment that the U.S. had previously outsourced overseas. Paul Solman reports on how a family textile business nearly 200 years old is adapting to this latest challenge.

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  • Judy Woodruff:

    Before the pandemic, transformations in manufacturing were changing American life.

    COVID-19 is now delivering a new blow, but Paul Solman reports on how one nearly-two-century-old family business is working to turn that around.

    It's part of our weekly economics series, Making Sense.

  • Paul Solman:

    Business resurgent in Fall River, Massachusetts, at least at Merrow Manufacturing, founded back in 1838.

  • Charlie Merrow:

    This is the first overlock machine. Merrow created the first overlock machines in the late 1800s,

  • Paul Solman:

    A hundred and twenty years later, eighth-generation owners Charlie Merrow and his brother Owen tried to revive the business, in an industry with a proud past and moribund present.

  • Charlie Merrow:

    The first thing people see is how much history there is. And the first thing I will tell somebody is that none of that pays the bills.

    (LAUGHTER)

  • Paul Solman:

    The Merrows' bright idea was to sew electronic components, simple ones, into clothing for the military and apparel makers. And then along came COVID.

    How vulnerable were you as a business?

  • Charlie Merrow:

    Completely exposed, having to shut the facility down completely, and not knowing whether we were going to be able to open again.

    After closing, your revenues, they disappear. To reopen requires capitalizing your company again, meeting a payroll, without any income. It was terrifying.

  • Paul Solman:

    Meanwhile, the whole country was terrified, and especially, of course, hospital workers, like nurse Jacqui Anom:

  • Jacqui Anom:

    It's literally frightening when you walk in there, and that — if you're spending half your brainpower worrying about if you're going to die, you're not concentrating on the patient.

  • Paul Solman:

    Because they didn't even have the most basic personal protective equipment, masks and gowns.

  • Charlie Merrow:

    It was a disaster.

  • Paul Solman:

    But one that Merrow, with its 500 sewing machines and know-how workers, was uniquely poised to address.

  • Charlie Merrow:

    After shutting the business down, with our health teams working to clean the facility up, and our design teams building prototypes, it became clear, through the phone that started to ring, that this product was needed so desperately that, if we were able to build it, we would get orders behind it.

  • Paul Solman:

    Merrow pivoted the business within days to make medical gowns.

  • Charlie Merrow:

    We're building 100,000 to 150,000 gowns a day now.

  • Paul Solman:

    It's now the nation's biggest producer of them. And we're wearing its masks.

  • Charlie Merrow:

    We're building 10,000 of them a day, and we will probably scale it up to 25,000.

  • Paul Solman:

    And as Merrow told Congressman Joe Kennedy, he's all in.

  • Charlie Merrow:

    We put in a bid to build 40 million gowns in Fall River over the next six months. It's a big deal.

  • Rep. Joe Kennedy, D-Mass.:

    Forty million?

  • Charlie Merrow:

    Forty million. We have a plan for it. I have got the fabrics for it.

  • Paul Solman:

    Politicians both near and far are interested.

    (PHONE RINGING)

  • Paul Solman:

    Merrow's phone happened to ring during our interview.

  • Charlie Merrow:

    I have a call today with the Canadian government.

  • Paul Solman:

    Wait, that call just now was the Canadian government?

  • Charlie Merrow:

    It was.

  • Paul Solman:

    And what do they want?

  • Charlie Merrow:

    They want to have a discussion about how to build technical manufacturing of medical goods that will survive for two, three, four years.

  • Paul Solman:

    Because Canada may be realizing something critics of American business have bemoaned for decades: the offshoring of manufacturing, which saves money short-term, but comes at a prohibitive, in this case fatal, long-term cost.

  • Charlie Merrow:

    There isn't an infrastructure in the United States that is capable of building even 10 percent of the medical products that we need today.

  • Paul Solman:

    Not the factories, not the know-how. In fact, 80 percent of the simplest protective equipment was sourced from China and Southeast Asia.

  • Charlie Merrow:

    Part and parcel with moving manufacturing to centers outside of United States is moving the design, the development, the pattern-making, the engineering of products outside of the United States, which is fine.

    Global trade is an important part of our of our healthy economy. However, without those skill sets local, it makes it much harder to scale anything up.

  • Paul Solman:

    That's why Merrow, one of the textile industry's survivors, was so desperately needed.

  • Charlie Merrow:

    It has been two months of 18-hour days, and every single day has been tense.

    The demand for these gowns is in the millions. People need them tomorrow. There are calls every single day from providers who don't have them that are wearing trash bags.

    We paid employees to be here twice their salaries to work here until late at night. And every single day, we worked at the very edge of our limit. There isn't anything I have done that's been harder.

  • Connie Batista:

    The hours was crazy for a while. I was exhausted.

  • Paul Solman:

    While distancing, while disinfecting, while masked.

    Do you like wearing a mask?

  • Man:

    No, not really. It's tough. Sometimes, it's difficult to breathe.

  • Paul Solman:

    But it'll get easier, presumably.

    Meanwhile, the mostly Portuguese immigrant work force, all of them legal, emphasizes Charlie Merrow, takes home, on average, more than $17 an hour, plus benefits. Merrow has added about 50 jobs already and expects to create another couple of hundred by year's end.

  • Connie Batista:

    We have no control what's happening in the world. And doing this, this type of work, makes us feel good.

  • Paul Solman:

    Now, Merrow is not alone in its pivot to PPE production. Shoe company New Balance, shaving brand Gillette, car companies Ford and GM, and many, many more manufacturers are for the moment stepping up, stepping in.

    But Charlie Merrow insists his is a sea change shift.

  • Charlie Merrow:

    At the expense of taking short-term business in, we signed long-term contracts, because this is the only way, in my opinion, for us to justify infrastructure investments, which is what we need in order for this PPE problem to not be a supply problem going forward.

  • Paul Solman:

    One thing that's happened during my reportorial lifetime has been the move from just in case to just in time.

  • Charlie Merrow:

    Yes.

  • Paul Solman:

    No warehousing of anything. Is there going to be a sea change, do you think, in how American business does business?

  • Charlie Merrow:

    This is the beginning of understanding how vulnerable we are to our ports closing.

    The business of building things is going to be a function of national security, in addition to ease and access.

  • Paul Solman:

    Are we moving back from just-in-time to just-in-case manufacturing?

  • Charlie Merrow:

    No, not yet. I think that, if the COVID crisis fades from our consciousness, that the industry will quickly go back to waiting for imported products to show up and not solving any problems.

  • Paul Solman:

    But Merrow, for one, plans to produce PPE here for years to come.

    Paul Solman in Fall River, Massachusetts.

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