Runs just under two hours. Good afternoon, everyone. Thank you for being with us, or being near us, at least in the technology since. I welcome all of you to todays hearing that weve entitled, examining the response to the covid19 pandemic. The subcommittee at the sound of the gavel will come to order. As the nation continues to fight the unprecedented Public Health crisis, americans worked to protect against further spread of the virus while trying to maintain a certain degree of normalcy, including maintaining a job and earning a paycheck. There is not a corner of the u. S. Economy that has not felt the impact of the pandemic todays discussion will talk about the harmful effects on the Manufacturing Sector. During this pandemic, many in the Manufacturing Community have adapted their operations to help provide products needed to prevent the spread of the virus. Distributionlesale company that pivoted to manufacturing face masks in response to a dire National Supply shortage, or a cartridge printer Manufacturing Company switching to Hand Sanitizer, we have examples of manufacturers in kansas taking the lead to compete globally and assist in meeting the needs that arise with the pandemic. Im involved in the oversight of the institute of standards and technology. It distributes resources to 51 states, designated centers to assist small and mediumsize manufacturers. The cares act specifically provides an additional 50 mean dollars to the fiscal year 2020 appropriation to augment support in response to the pandemic. The law provided trip additional assistance for all funding that fiscal year. Comprehensive Pandemic Response package offered assistance to manufacturers and other businesses including but not limited to the paycheck protection program, the main andet Lending ProgramEconomic Development administrations recovery assistance brands. Congress must uphold its oversight responsibility and make refinements where appropriate to ensure federal investment. In addition to resources, regulatory and technical patents to enable new manufacturing venues such as production of mask, gloves, gowns, ventilators and other relevant items. While i understand the u. S. Food and drug judgment the National Institute of health, fundamental in sharing critical information to enable solutions. The private sector plays a Critical Role in disbursement of this information. Coupled with Robust Resources dedicated to testing and ppe will play an enormous role in the nations economic recovery. As congress enters negotiations for future covid19 response package, i urge my colleagues to use todays discussion to reinvigorate their efforts to provide thoughtful federal policies and resources to our nations job creators and innovators. I like to highlight senate bill 3705, a bipartisan piece of legislation of develop with senator warner to allow the Aviation Manufacturing sector to retain workers who are at risk of permit reduction through furlough. This proposed costsharing program would enable the private and Public Sector to come together to preserve uniquely hardhit industry. I would be remiss if i did not address unique National Security and economic consequences if the u. S. Does not immediately fortify an increase its manufacturing capacities in supply chain as it relates to Strategic National stockpiles of ppe. The threat from china to our Manufacturing Sector is real. In 2019, medical equipment and wereed products in china estimated to have 20. 7 billion dollars value. According to calculations based thisficial u. S. Data, number likely understates the current extent to which the u. S. Relies on china for pharmaceuticals and medical equipment, products, and supplies. Demand for the supplies rose during the pandemic. The American Manufacturing industry is plato rigell role in mitigating harm stemming from this pandemic and it is vital for congress to acknowledge this work by providing appropriate support with thoughtful policymaking. Kansas is home to wichita which leader withnations innovative collaboration that takes warm in various other manufacturing capacities. Todays conversation is peonal to me and to my constituents. I look forward to hearing fr our Witness Panel that provides different perspectives to the same important issue. Mr. Neil gilman, the chairman and chief executive of cycle think based in shawnee, kansas, and mr. Ny stove all Michael Wessel, commissioner of the u. S. Economic and security review commission. Theational association of manucturers provided their american renewal action plan describing their collaborative efforts of their Member Companies and responding to the pandemic and i asked that this doment be submitted to the rerd. With that, i turned to the Ranking Member, mr. Blumenthal. Glad you have joined us, thank you. Ordinarily i would be with you in person in washington, d. C. , but im taking the precaution to participate from home today. For you and for me and for many of us, the issue is indeed personal, and im so glad that you and the chairman have agreed to do this. To neilcially grateful gilman for participating remotely, as i am doing. I want to just make a couple of quick points, and i know we have a vote, so we have to take a recess. The coronavirus pandemic has created a surge in demand for personal protective equipment and other Public Health products all across our country and the world. Everyone, particularly Health Care Professionals and essential workers, or heroes today, urgently need face masks and Hand Sanitizer, among other products. There is a universal need for critical supplies. It exposed vulnerabilities in our system and our supply chain. The United States relies heavily on the import of medical supplies and equipment but china and other countries focus solely on their own National Health response. As a result, supplies severely careled and are Health Officials and First Responders and frontline workers were put at unacceptable risk. Fortunately american manufacturers took up the mantle and produce ppe. Companies all around the country began repurchasing existing manufacturing and invested in new equipment often putting their infrastructure out of their own pockets during this crisis. There is a modern connecticut success story. It is a model for america. Im very proud of neil gilmans family and all of the companies ,n connecticut that stepped up stood out, and spoke up to help address this address Public Health crisis. , there currently produce 200,000 face shields every day. By early next year they aim to ramp up. They are growing. They are planning to open a facility, they are going to hire new employees to meet demand. I look forward to meeting with them and other companies in connecticut. At preferredtime protective equipment. A Global Leader in manufacturing healthd retail public care. Ofst responders complain headache and discomfort from extended face mask use as well as concerns about single use nature. They use their expertise to design a new face shield that is comfortable, it can be reused, it is affordable, and it is a great public service. The expertise of them and countless othersur central workers have been served by is really a Great Success story. Safeguarding our supply of ppe is not only a matter of Public Health and national ready, it is a test National Security, it is a computer protectionconsumer p. Unfortunately, counterfeit ppe n95 face and 90 masks flooded the market. There was little to guide them. Inadequate measures were taken to find or remove fake medical supplies. The consequences are that is why it is so important to ensure a reliable domestic supply of manufacturers can work hand in hand. Congress and the federal government should do more. Actdefense production provides useful tools. Unfortunately for all americans the president has failed to utilize the defense production act to support american manufacturers. House passed tens of billions of dollars in funds to assist health care suppliers and it would require the president to use his authority to support more production of diagnostic tests, medicine, and other crucial medical supplies. Chairman andthe senator moran for calling this hearing. Nothing is more important than providing this kind of affordable, reliable, and robust andly of ppe medical supply other aid to our frontline workers and to americans as a whole. Thank you, mr. Chairman. In my mistakenat least tempoi failed to complent you and thank you for your cooperation in putting this hearing together. I think we thought this would be, looking back, unfortunately, we have not escaped to the challenges that lie ahead. Whe we are looking at at has transpired in the past, we are doing so in preparation to make sure our country is prepared for today and tomorrow. Thank you for your cooperation your assistance. Thank you for working closely with me to see that this hearing took pla. We are going to turn to witness testimony. E order our witnesses will testify is mr. Ballou so, mr. , and mr. S. Stovall wessel. I now call on you for your five minutes of testimony. Welcome, and thank you for being here. Thank you, senator blumenthal. I appreciate this opportunity. We are based out of kansas. I would like to take us through the journey we have gone through so far. Struckhe covid pandemic in the early part of this year. The covid pandemic which started at the beginning of this year continues to impact society. It exposed critical gaps in our Health Care System and opened up fault lines we never knew existed. This isoot of all of one harsh reality. We do not have a Strong Manufacturing base for ppe or equipment that is used to make ppe. Single use disposable masks are going against established practice of 50 years. Manufacturing the equipment, is overseas dependent. From masks to ventilators. Machinery and raw manyial from overseas times precovid. Raw materials a minimum of 30 to 60 times overseas. Domestic production continues to not meet the demand. We rely on imports. Are there Quality Controls on the manufacturing process . We do not know. Gaps inestions leave our preparedness that need to be addressed. How can we set up our economy and society for resilience in this pandemic for, god forbid, future disasters . Mask was pioneered in america. Why is it we have a scarcity of good quality face masks today . How can we achieve selfsufficiency . Way to actually achieve our is through producing own medical manufacturing equipment as well. And to secure our own supply chain. Chain. Material supply factory is based out of the wichita area of kansas. This was a few miles north of where i lived. My wife, a physician, works on the frontline in an underserved area. My younger daughter at that time was nine months old. Still nursing. I requested her, selfishly, if she would consider quitting her job. She shut me down immediately and said, that was what i had signed up for when i married her. So i started looking for solutions. Solutions to keep her and her colleagues safe. Quickly i realized charity was just not going to cut it. We had to manufacture. We had to do that to address three critical areas of availability, quality, and supply chain rebel ideally reliability. Make them out of american Raw Materials. We pivoted to make face masks. Learned bulk buyers of ppe, state and local governments, were procuring them at the lowest price, so the overseas product that has been dumped in the u. S. Ends up being the default choice. Ironically, the best opportunity to strengthen our supply chain is deepening our dependence. The direct to consumer sales front was very challenging. Well intended policies by social media and the ecommerce channels and at preventing price gouging were inadvertently stifling american manufacturers like us. Prevented we still are prevented from directly advertising to consumers. We are forced to rely on oldfashioned cold calling. And yet the american manufacturers who, in the true american spirit of fortitude in the face of threat, facing pressure on either end, i take to thetion from the ride moon. 1961 propelled our dominance in space and the human race benefited. Technology is what inspired firstgeneration immigrants to come to america to contribute positively to change. To help people policy that , theshes innovation prome manufacture superior quality and the zeal to take the human race forward. Let us not ask can america do it, because america has done it multiple times before and very successfully so. Recommendations for coideration. Thet selfsufficiency in production of medical equipment as a national priority, ju like we treat National Security, foodmic security, and serity. Incentivize startups to democratize, release the animal spirit o innovators. Supportive policy will help them thrive, eecially in the fe of relentless dumping of overseas product. Educe regulations statistically speaking, 99 of startup businesses die in their infancy. The first one to two years. Regulations during this phase can be very detrimental to this very critical industry at is already under significant stress regulate, let us remember america has always produc more than enough not just for ourselves, but for the entire wld. The human race always benefited from america progress. To blanket restrictions, consider nuance data driven policy to keep the door open for foreign markets. This will most certainly rest in secondary and tertiary benefits that in a pospandemic world put us in a better position, much like the gold to land on the moon d. I take this opportunity to urge fellow members my fellow mafacturs to fix this. Thank you all for the opportunity. Testimonyou for your and the passion with which you presented it. Let us not hear from mr. Neil gilman. Hear from mr. Nei l gilman. Thank you for the opptunity to provide testimony today on the urgency of sustaining a domestic supply chain for ppe during the covid pandemic. I come before you as a secondgeneration business owner. A Manufacturing Business in connecticut. Made textiles in new england. My father built a business for theyall training equipment started in 1929. My company is the nations leading manufacturer of when the pandemic struck and the nations governors were issuing stayathome orders and most if not all high schools and as well as the entire National Football league, the game of football was on hold. College football at 591 schools was canceled or moved to the spring. High School Football in 24 states was canceled more moves to thespring or moved spring. Our entire market collapsed. We were on the brink of shutting down and laying off all of our employees. Potentially going out of business. Grandfather, who repurposed his textile mill to make Army Blankets during world war ii. Too, wanted to contribute in some meaningful way to help medical professionals on the front lines battling this deadly covid virus. About the terrible shortage of ppe in our hospitals, nursing homes, assisted living, and urgent care facilities. I saw pictures of doctors gowns, rain ponchos as using ski goggles as i protection, and recycling n95 masks. I later lrned the whole domestic ppe market moved manufacturing to china to take advantage of cheap labor and material. Time, china was dealing with their own domestic pandemic. Hospitals found the normal supply chain choked off, unable to meet their demand. Gilman gear has a large operation. Equipment. I think we have lost mr. Gilman. That westion is probably need to reset anyway so i can cast a vote, the other members can cast theirotes. Now i will arrive at the end of the first vote and return. Is expected toe replace meo help accomplish that, he can reconvene the hearing. Mr. Gilman, if you can hear me, we will start t second phase of o hearing with the conclusion of yourestimony. Thank you. The committee will standn recess. There is a potential of a third vote now, we will not know whether that is happening, but maybe we can work it so we can tagteam the chairmanship. Senator blumenthal i think is back with us. I will make certain he and i can trade positions so we can both vote. If that happens. The committee is reconvened. Mr. Gilman, if you are available , you have about a minute and a half left. We heard your testimony to that last point and we would love to hear your concluding remarks. Can you hear me . Mr. Gilman . Can you hear me . Yes sir. Myi am going to pick up testimony from where i left off . Yes, sir. Ok. I was determined to make isolation gowns because we had the equipment to cut and sew them. I quickly got a sample from a local hospital, design my own pattern, research the materials the gowns were made up, and built a prototype. I sent it to yell new haven hospital, they evaluated it and awarded me an order. There was a surge demand. Hospitals needed more gowns than they could buy from their normal supply chain and they turned to me to bridge the gap. Twofold. Em was the hospitals wanted the gowns fast and they wanted them cheap. To keep the aggressive supply schedule, i had to invest in new machinery and hire more employees. We went from making 200 gowns a week to making more than 12,000 gowns per week. Pricing was an even more difficult hurdle. Hospitals were reluctant to pay more than the price they paid for the product exported from china. I could not match that price unless i moved my factory to china. My gowns are 100 american made. I am at a competitive disadvantage. My labor costs are higher, my material costs are higher. I am able to mitigate some of the cost with technology. At the end of the day, my americanmade gown is two to three times more expensive than those made in china. However, my americanmade gown is of a Higher Quality and meets a higher level of protection. Market and isolation gowns considered a commodity item, buyers in the medical communy are juslooking for the cheapest price. Plea toe with an gent the federal gornment to do more to help with private sector to sustain the ppe business of the United States. Market forates the ppe. The Chinese Government has made manufacturing p a pority. Not only from a Nation Security standpoint, but also with a view to creatg a globallyover crital marketplace. The Chinese Government has implemented this strategy by taking followingeasures. Get factory owners from the Chinese Government. Second, ey get subsidies. Third, chinese hospitals are giving chinaocal, suppliers a vast and captive market. Can playal government a vital role in sustaining the United States companies that if itivoted to making ppe will do the following. Americanplement a buy preference across all federal agencies that purpose purchase ppe. Second, create a subsidy for companies that manufacture ppe. Creditestablish a tax for every job created to manufacture ppe. I am not looking for a handout. To use a football term, we want a level Playing Field so we can compete with china. What is at stake is the future of manufacturing ppe in connecticut and across the United States. If we let china dominate the market, if we let them control the supply chain for ppe, doesnt that compromise our ability to cope with this pandemic . Do we want to be at the mercy of china when and if there is a pandemic in the future . What is at stake here is jobs. The 50 jobs we support at gilman gear are precious. If they go to china they are not coming back. What is at stake is our ingenuity and ability to pivot on a dime from a mature business making football equipment to making ppe to serve the medical community. We evolved and we reinvented ourselves during a national emergency. Jobs during the worst economic downturn in our history. Thank you. Testimonyou for your and the resnse it describes that you provided to covid19. Kraska is ourext witness. You are recognized for five nutes. Ok. Located in kansas. I would like to thank senator moran a senator blumenthal for the oppornity to hear my testimony. We started in 1992 in the basement of kansas home. Our kansas home. We srted a business which remains focused on principles. Leadership,servant two,erving our leadership with in aquality products business that impacts people and strive to create Economic Development. Myself are and involved in th production of for making weapons. At the end of theold war, the demand declined anwe found ourselves looking for a job. Purpose. A sense of we all h a deep love for manufacturing. Employment to people. We experience what happens when a Large Employer h to downsize. In 1992 we launched a busine. We became one of the largest toner cartridge manufacturers in the usa. Bece fourth of 500 companies and we began to expand had become the largest kjet manufacturer in the world, employing 800 people. The demand was being fueled by skyrocketing growth of inkjet savings, consumer versus namebrand, and the etyization millions of namebrand cartridges were ending up i landfills. For remanufactured oducts continued to increase, the components were starting to be developed in china. The dominantecome source of remanufactured componts and thefive to 10 short years later, the largest of compatible aftermarket cartridges in the world. They were knockoffs of original cartridges exported to thesa with no respect for intellectual property andatent law. China began to flood t market to make it impossible fothe u. S. Remanufacturing to compete. Used the china infringing product sound such a scale they would be impossible to compete with. Chinese mufacturers develop their own intellectual propey. By that time they had so much scale it was unbelievable. A chinese product was available in china for five dollars. The same product we manufactured would cost 20. U. S. 15, 90 of the 5000 remanufacturing companies were gone. The number of companies that are viable is estimated to be no more than 100 in the u. S. That are still left. Although we continue to manufacture we were forced to choose between buying and selling a line of chinese products or going out of business. Years, twost five thirds of the products continued to be remanufactured in our factory, but we do supplement them with chinese products. We just cannot compete. Chinabased Companies Control 80 of all aftermarket cartridges, the technology barrier. Is those Chip Companies in china do things that are against the law in the United States. Chinabased companies are the largest producers of aftermarket cartridges and chips in the world. Our. Manufacturing local manufacturing has never wavered. We were frustrated with chinas chokehold on the industry but continue to produce while also buying products in china. Late january,eturning from a sourcing trip we witnessed firsthand the beginning of the covid pandemic which inspired us to begin manufacturing ppe supplies. Ofhad hundreds of millions plastic objects. Of the ppefound most products came from china. The first product we launched in our factory was Hand Sanitizer. We used much of our equipment here to bottle this in kansas. Buyound we would need to materials from china once again. The u. S. Has no small bottle manufacturing companies. Continue to create opportunities for manufacturing with theare engaged production and bottling of a safe surface disinfectant known as hlcl. 80 times more powerful than bleach against viruses and all the pandemic bugs out there including covid19. We are partnered with another kansas company, using our operations background in making preparations to produce and hlcl in our factory. Our goal is to grow the company and make more production jobs. We are still facing pressure from china with production still located in china. They are smart and ambitious people. One cannot blame them for taking advantage of the political realities. It has been my experience and observation from spending time in china the Top Manufacturing companies are supported by the government. Supports to bring manufacturing to the u. S. It will require policy from u. S. From washington. We welcome further discussions about how to bring manufacturing back to the u. S. Our team consists of experienced manufacturing and labor. We would love to be of service however we can. Thank you for your time. Thank you for your passion for what you do and for kansas. Stovall is the chief executive offer of officer of Kansas Manufacturing Solutions. You are recognized for five minutes. Good afternoon, chairman moran and members of the subcommittee. Thank you for this opportunity to appear before you to discuss the manufacturing for the covid19 pandemic. We are the epicenter for kansas. The manufacturing extension partnership. We are the nations only Program Providing handson direct support to small and mediumsized manufacturing to help them compete more effectively in the Global Market space. We have a center in every state plus puerto rico. We have 1500 manufacturing experts on staff and nearly 2103rd Party Service providers 2100 thirds Service Providers and partners. It is because of this history that Kansas Manufacturing Solutions is uniquely positioned to help support u. S. In the exceptional challenge that was presented during the covid19 pandemic. Manufacturers have had to respond to covid19 challenges within their own facilities, but they are also helping our nation withgh the pandemic personal protective equipment, theilators, essential to Public Health efforts. Manufacturers are shifting their capabilities to meet u. S. Need. Stories we have heard are similar to what is happening across kansas and the United States. Manufacturers across the country had to close their doors. Customers could not buy from them. Threats. D mortal kms and the National Network have been here for them. Manufacturing continues toward economic recovery. The temporary cossharing has provided muchneeded services to manufacturers during unprecedented times. Months, caresal act funding and costsharing help them retool, modify processes and procedures, and adapt to new health and safety protocols. Many remain working remotely to. Rotect staff they are trying to protect their own stuff as well. Congress, for the temporary costsharing. Issues have been heightened because of the pandemic. Organizations are squandering to materials and ppe. Worked aroundtheclock in the early days, matching companies to suppliers. Databasesply chain particularly around ppe as we went. Statebystate, through our National Supplier system. Disinfectant, henson ties hers, Hand Sanitizers, other products. These had previously been sourcedverseas. Delivered to client along with medical centers. We were able to quickly match not with a manufacturer only in the United States but in house. Able to keep this supply chain going. We have heard from rick about the issues hes battling. That is another thing across the that have expanded their capabilities as manufacturers. Workplace safety is a huge concn for manufacturers. It is heightened during the covid pandemic. Workforceof the u. S. Could shift to remote work. Manufacturers could not. To help manufacturers undersnd safety protocols in facilities and beyond, and helping manufacturers respond to covid19, helping th build resiliency. Manufacturers are driving economic recovery while also facing uncertainty themselves. The goal of the entire National Network is to help get manufacturers back on their feet, to deliver tools to em asaddress the uncertainty the country continues to get back on its feet by providing critical equipment. Supply to the manufacturers of the United States. There is so much economic uncertainty. E really have worked hard one of the services developed by manufacturerselp look forward throughout the pandemic. Consultancy,tra manufacturing assessment, in a strategic way to ensure the acilities as well as the future for their employees. I hope what i have sharetoday has given some insight on how kms has responded to unprecedented conditions for the United States and how the has respondedrk across the United States. Together we are partnering with certainlyers and i appreciate the opportunity to appear before the subcommittee today. Thk you. We appreciate your testimony, your willingness to appear. Our final witnesses mrmichael was so. Wessell. Ell Ranking Member blumenthal, members of the subcommittee, thank you for the opportunity to appear. And ie is Michael Wessel am appearing as a commissioner on the u. S. China Economic Security review commission. I am only speaking for myself. The stress on supply chains and , theanufacturing base availability of Public Resources , and policy responses. We need to address todays needs and prepare for a future pandemic. By manufacturers wanting to contribute to the crisis. Match withasier to state and Hospital Systems to the their needs including hospital in senator blumenthals home. Our nation owes a debt of gratitude to our manufacturers and workforce who have come to the aid of our country to meet the critical needs of our Health Care Workers, First Responders, we all entire population know well supplies are so available, there are still shortages. America must do better to help them protect our citizens. The Chinese Communist partys industrial policies and our shortsightedness have led to a dangerous reliance on china for pharmaceuticals, active ingredients, medical devices and. Quipment including ppe the impact of the coronavirus was unexpected. Our increasing dependency on china is not news. Theiris willing to use manufacturing power. The ccp leadership was willing mask diplomacy by using shipments of ppe to foster diplomatic gains. The ccp has been willing to rep a nice weaponize supply chains. You cannot allow health and safety to be held hostage to economic, or military confrontation. We no longer have the capacity in the u. S. To make penicillin and are completely dependent on foreign sources. Apis we use come from abroad, a substantial proportion coming from china. Remdesivirent in comes from china. Products we are partially or entirely dependent on china. That,ficial testified quote, the National Security ks of increased dominance chinese dominance on the global api market cannot be overstated. ,ince china joined the wto operations have expanded dramatically. Chinas policies were designed to promote that. What is troubling is the expansion of r d. National firms increased r d spending in china at nearly twice the rate of domestic spending. China d expenditures in on the chemicals including Pharmaceuticals Surge between 2000 and 2017. Chinese state directed and controlled entities have engaged in the u. S. With many focused on the health or health care sector. Actors in china have used illegal means to obtain the health data of u. S. Citizens that may allow their firms to dominate the increasingly important biosynthetic sector. The focus today is on medical supplies, but our dependence on china for many products, some of them critical, is broad and deep. Areas, this reduces our potential resilience. We should examine supply chain risks and determine the potential impact on our national and state Economic Security. Again, thank you for the opportunity to testify today. Making sure we never face these challenges again. Wessel, thank you. You speak for yourself and not the commission, but i understand that in a short period of time there will b a first oall i agree with your sessment that chi is predatory and protectionis in economic policy, undermining u. S. Economic health and national curity interests. I appreciate you saying that and i agree with you. Your commission is expected to release this years report in the next few weeks n you describe any formal recommendations you uld expect to be included in terms of assessing and improving production either in the united producing medical supplies or even pharmaceuticals . What do you expect them to be . Thank youor your question. Fact we haveout in already a public report on this matter. Missourir senator of and i cochaired a hearing on this in 2019. Six democrats d six republicans released this report we are unanimous behind a number of recommendations regarding this sector. Review those if i could. Bility to dihe deep as you are doing today. We have all been fced to as we look to address this pandemic, we can harness procurement policy through medicare, medicaid, veterans affairs, to buy american produc, to useur existing authorities d leverage those to bring supply chains back to the u. S. Second, we have to do a better protectingng the fda americans in terms of their safety for these products. Products that caus a number of dehs in the u. S. Coming from china. Found a bloodwe pressure medicine was actlly tainted with rocket fuel because both the apis and the rocket fuel were being produced at the same facility. That product made its way to u. S. Consumers. To a should be allowed a company in china sending products to the u. S. We need make sure that happens, those products are unable to come here. , we need to disclose where essential drugs and prodts are coming from. We can do that through federal procurement standards so that nowens and officials k where the products are coming from and how we can best prepare and protect. Much foryou very explaini that to me. , your companies have worked to create ppe manufacturing pabilities in the u. S. In response to covid19 with goal of creating a homegrown american product. Not only does china dominate global ppe production, they dominate ppe component 10 manufacturing equipment sectors. You have described som of those circstances or at least those facts in your testimony. I wondered if you could go into more detail describing the challenges in finding ppe components and manufacturing equipment. Bottles that the cannot be sourced in the United States. I wt to hear more about the challenges you faced. We had numerous kaas counties, hospitals, nursing homes, and others, ll our office and ask for help locatg ppe, often when it was discovered that what they had purchased it was sitting in aort in california waiting to be approved by the fda which was in ma instances denied based upon quality. I also would give yothe chance to tell me or tell our committee about quality of your competitors and their pructs from china. One of the stories i had in my tesmony, but my ttimony was too long aeady, i cut it looking forted ttles in the u. S. And we couldnt find mufacturers of it. They were all sold out for three or four mohs. Having a lot of experience in china, we started looking, narrowing down the fie. To give you an idea the situation we ran into, we found a bottle manufacturer that could produce for us. The samples were fine. We started buying th bottles. We were puhasing the label from a kansas bel manufacturer for . 15. The chinese bottle manufacturer offered to plan printed the label and apply the label for one penny. Have to changthe game in source and buye these products. I think it is going to take government involvement. As mr. Gilman talked about, it is all down to one penny. Help fromme type of our politicians that help us with those, they could chae that. That was an example i wanted to she earlier. Buying with ae label we have sourced in the u. S. , he is a chinese coany that offered to print the label, apply the label for one penny compared to . 15. Ose are the pressures you run into. What you would tell me is they would bmore expensive . Yes. Mr. Gman what i was saying earlier, noty, was the bottles were in the United States at all. It was an extension of that process of buying the bottles and the process of buying the labor and the extra process to apply the label, the chinese supplier of the bottle was willing to do it for one pending one penny. Thank you. You may need to turn on your mic. Sorry. I will answer. Fit, theost critical aspect anecdotally, what i some offrom our the best testing filities, the testing lines are really ogged up right now. , anothere a product testing cycle is six months and that slows us down. Why is theeaso is so much product being tested whh is not manufactured in america. Hear not a very good quality. The net loser is the American Consumer. The erican product is not going to get them faster. Whatever product they get is ing to continue to be of inferior value this is not good. The second aspect i want to toh on is the abuse of dominantosition. When we started, about 67 months back six to seven months back, the machines we were trying to procure were available at five to 10 times the precovid price. A typical machine that would was 70,000 precovid china to 150,000. 00 we still went ahead. The other thing, the raw material. Precovid was being if i remember right, i might have seen 135,000 on it. That is 67,000 times more. Really claim to i watchedger on it, these prices go up day after day, week after week. We did not want to be priced out. Every day these prices went up, no matter whether we spoke to one vendor or half a dozen. Are these guys marching to a beet . I do not know. They were synchronized. Will Market Forces alone achieve kind of synchronization . I do not know. That is an open question i have not been able to figure out. These are the kind of things we have to brave. We continue to believe the while theynsumer, know whaa bargain is, still prefers valu let me turn to senator blumenthal f his questions, and im on my wato the senate floor to vote. Ok, i willmenthal be shortly, as wl. Senator sullivan is here if we need him to chair the hearing while we are both gone. Ok, i will bel brief with my questions. I want to make a quick point gilman and gilman gear to impress some of my colleagues including my friend from nation inthe cam,oping the pylon developed with espn, which is now an independent indispensable part of every game in 2015, theyand brought to market the world tackle ring which revolutionized balls are caught, preventing concussions from being as prevalent as they have been, so he is a talented of sportsn that area equipment, but then had to pivot using what we know in connecticut as good old yankee ingenuity. Certainly innovative and inventive spirit and began making isolation and surgical caps, isolation hoods, and other ppe now serving to protect Countless Health care workers across connecticut and the country. I want to thank him for being othernd to ask him and members of the panel whether they think the defense production act would be useful in developing the supply chain and providing the kind of have madeat you reference to, because it would, to develop and make more robust that supply chain and perhaps even reduce the cost of the Raw Materials and equipment that you need to produce the uipment you do. Yes, senator. I dont see mr. Miracle mr. Gilman responding so thank you for your question. A critical part of wh the solution needs to be. I think we saw in this pandemic it was not utilized quickly andgh, effectively enough, there has been aack of transparency and accountability. Businesses the small all the way up to the big businesses, but small businses are in need of Quick Capital that can be effectively deployed toeet many of the gaps that exist in the supply chains to retool and do what they need to do. Thats a critical tool needs to be enhanced for the future. Sen. Blumenthal thanks for that comment, mr. Wessel. Mr. Gilman is on . Probably not. I apologize. Technical fficulties prevented him from connecting. I nt know if you have any comment on the a . I personalllike the idea. I think when you are starting a new iustry andou are competing with the chinese, very establhed businesses with a lot of leverage, a lot of volume, having purchased items in china aong time, it is hard to figure out the pricing eve how can it be so cheap, right . When i first started going there, the cost of lab was around . 80 an hour. Sevenareas, it is dolls an hour but the pricing is so low, you canmake sense of it. If we were to have some environment, se part of the economy that was satisfied to allow us to achieve momentumnd get leverage, right . Parts of the supply chain, iwould go a long way to restarting Many Industries to get them going. Thats my impression. Sen. Blumenthal those commes arvery pertinent and timely, weve beenou know use thethe predent to specific effort senator baldwin, who you will bheard from shortly, that would compel the president to hich for reasons difficult to comprehend, he hasnt done but the point you veryand others are very, powerful. They link to unfair competition from china. Some of us have been complaining about it for yea. It affts every state in the country. We hear the same kind of complaints and using the defense prodtion act is an essential part of the picture and also developing thekill labor that is needed to provide the Human Resources you need. Component thatnd is in the supply chain, it is very much the women and men who do these jobs and often learn those new skills. When youonvert, when you reengineer your assembly lin that is an iortant part of the picture. All for being a part of this panel. I have to go vote. You, setors multitask. Overoing to turn the gavel two, i gue, im being told we are going to have to taka short recess. That is the last direction from our chairman, senat moran who is now on the floor voting, but has communicated to meet through text that i am instructed to declare aecess, so we will be in recess for i hope just a few minutes. Thank you all. Thanks for being a part this hearing. Senator rosen . Subcommittee will reconvene. Hearingthe most clunky ive ever partipated in, let alone chaired and that is saying a lot for the United States senate, so i apologe for our way to our witnesses, but to all who are paying attention, how challenging it has been with the series of votes. Senator cantwell is next to question. Cantwell thank you for inting a witness that is both in kansas ander a waington state residents to boot. I do want to work with you on the manufacturing workforce workforce issue that you and senator warner introduced keeping the supply chain and Aviation Manufacturing. I appreciate this hearing and i know we are dealing with an increase in the number of cases and challenges we face. Im very proud our state has kept our rates of infections and hospitalizations down, and appreciate the ongoing efforts but im also impressed by the manufacturing efforts in our state. Everybody working together. Outdoor research converted one of its seattle facilities into making surgical masks. They used to make outdoor acquittance and now, they are making 400,000 surgical masks and 60000 and 95 respirators a week. Plastics and designs that matters and other medical expert designs to help with the shields. At one point, boeing was creating face shields, as well. Flow international produces cuttingssure jet systems and has produced over 200,000 medical grade face shields to the state and nearly 40,000 different distributors distillers, including the tribe that had just opened up new facilities, switched over to Hand Sanitizer. I feel the american spirit is alive and well with these manufacturers who have shifted production. Witnesses could talk about we had a lot of frustration on the defense production act, but what do we need to do to give clear indications to manufacturers that we still need this production level and how can we gain their help now that we are seeing a spike again and necessary equipment . Could you please repeat the first part of the question . What do we need to tell manufacturers . Of guidance directive do we need to give them to get these production levels up that we need because of the change in conditions we are facing for the next several months. If i may take this opportunity, the biggest is being ableace to sell. Two different channels to be pursued. One was to go after the opportunity to sell to at the local or federal level. The biggest challenge we ran into was by default, the policy whichd the lowest price, just meant that the product that is being dumped into the United States is the default choice. We cantt say necessarily compete and im not going to necessarily say that the American Consumer has to pay ut before wece, b achieve that level of economies of scale, there is a need for the American Manufacturing industry to be supported. That is not going to happen over a day or two. It is a process. It will help us scale. We have to build upscale to achieve economies of scale, but the first helping hand could policy to atifying least set aside a part of the procurement funds to go to american manufacturers. Rootsill help us put our in the mediumte. The second one, probably not super relevant here, but neverthele affecting us significantly is organic growth t its highnately point given we cant adverti directly to the consumer. Prominent search enges, google, bing, or social media like febook, twitter, dont really allow us to advertise because they are worried about price couching ouging. The barriers thatre established are making it difficult r us to put our roots by reaching out to the consumer. Sure this mask im wearing now was gotten off amazon. What do you mn . There are manufacturers producing supplies and they are unable to sell them because the modern way to reach the customer would be to advertise on google, make it available on amazon, and send a link that would appear at google and put an advertisement or maybe on facebook. I come from the Technology Industry initially, so i worked to some extent on bing, but microsoft. All of these opportunities are gone. The companies are worried, and rightly so, that there is price gouging practice due to false advertisement and everything, so american manufacturers, once we have a company on american soil, completely traceable. Is not like we are worried we should be scared of or we are not so prone or we cant easily abuse the ability to sell to the american customer like maybe others could. Sen. Cantwell basically, we need something of a clearinghouse . Case, point ofer Care Technology that just needed a little funding to go to scale airport,ould be an test within 20 minutes which, for aviation, would be incredibly important. We do have these manufacturers, so i agree with your first point about the funds. I agree we should help with some clearinghouse on making you feel comfortable you can advertise these products. You need to know they need a standard. Was there a third point on this . Mr. Bulusu that was it. I tried, by the way, reaching out to executives at amazon. Forr threeandahalf to four months, we found it diffict. If we cant get into amazon, there is a problem. Sen. Cantwell thank you, so basically funding and some way sure you feel you are comfortable meeting the standards and advertising people will feel comfortable you are meeting the standard. Thank you, mr. Chairma thank you, mr. Chairman. Covid pandemic, we have seen the United States supplyhain andanufacturing industry face a numb of challenges to keep up with the demand of certain resources, particularly personal otective equipment. What steps should the United States take to make sure we have a more resilientupply chain . Thank you for your question, senator and i think we thisan all too clearly in sector, ppe, medicine, etc. , that has raised public attention, but this exists all across a broad crosssection of industries. First of all, in this sector, i think we need to make sure we have a Strategic National stockpile that is adequate to the task. As i said earlier, no one expected the virulence of this pandemic, but we have to understand that similar situations could arise in the future, and we need to make sure we are prepared. That means having domestic , includingavailable surge capacity. It may be idle, but we need to support it, potentially with federal funds. We need to make sure we have the stockpiles necessary to quickly deploy to meet needs. The fact is, our Health Care Workers, those on the front lines, should not be having to search for equipment, having to potentially use substandard equipment or having to reuse that equipment. The dod has been looking at how to make sure the Industrial Base forble to meet surge needs any number of defense procurement needs. We need to focus more our own security and what types of Manufacturing Capabilities must exist here to support our National Economic health and agricultural security. , in yourovall testimony, you highlighted at the beginning of the pandemic, several manufacturers struggled finding suppliers to support their business needs. What other issues did you see with the supply chain and how has the manufacturing and Partnership Program than able to help alleviate some of those issues . Ms. Stovall thank you for the question. Like i mentioned in my no nationalhere is supply chain. Early on in the pandemic, we were all looking around. Where can we find ventilators . When can we find masks . Where can we find hospital wns, curtains . All the things that were critically essential means to help this Public Health emergency, so what we did very early on i am reminded of a story ill never forget it. Was a sunday afternoon back in march. We got a call from rectors across the national got any directorour executive of the program, carol thomas, and there was a request from the what houslooking for manufacturers across the United States could manufacture ppe equipment. We were very early in this paemic. Everyone was trying to figure out what this was and what the needs were going to be. We had two hours to respond on a sunday aernoon. With two hours, the national were able to look into our own states. Even though there was not a national database, even though we didnt have, fraly, at the databases of who made ppe equipment in our state because of the relationships behalf we have, because of the work we had done in our state anacross the National Network, we were able to come up with a pret exhaustive list just within a couple of hours on what manufacturers across the states could meet these ppe needs. That is one of the things weve been doing. One of the other things weve en doing is we heard earlier talking about the need for bottles. We hear those kinds of needs are all over the place. Manufacturers have really to tailorn their own their production to critical need p, but there are still gaps in supply chain. Level ast the state well as across the national is reallyve done build an understanding owhat capabilities are in our state. What capabilities are in our states that can help meet this crisis . That is anything from bottles to dispensers, Hand Sanitizers, masks, n95 masks, all of the things that might go to any part of the supply chain. Weve been doing this state by state weve also been linking that through the national have, so we are able to help meet the needs not justn our state, but across the country. Thank you, and mr. Chairman, my time is expired. Questions to submit to the record. Sen. Moran the next senator to inquire a senator klobuchar. Klobuchar thankou to all the witnesses on this important topic of manufacturing. A few days ago, i talkedo manufacturers in my state of Small Companies who e struggling in the pandemic because of coronavirus, quarantine, everything so i would urge all of my colleagues it is time to do pandemic relf in the next month, that we cant wait until a new president comes in. I think we have to do it now. Only political statement re. Ill start with you, mr. Gilman. Required rs unemployed americans, people who dnt think they were going to lose their jobs and when we get the day after tomorrow, on a vaccine, we will have different types of jobavailable and we were already seeing we were did not have enough people in manufacturing to filjobs. We still he openings in my a billate, so we have for chill skill changing credit. Isis bipartisan, there procurement and it can provide a de range of training programs. Mr. Gilman, do you believe in increasingorker skill sets to help workers to reenter the workforce now or after we get to the other side of this . Gilman hello . Sen. Moran im t sure, senator that mr. Gian is still there. That is critical. If we dont have the skills, we cant meet the needs of the manufacturers get things back online, get people back to work, and meet our needs. Wantklobuchar anyone else to chime in on this . Thanyou, mr. Russell ms. Stovall senator, this is tiffany stovall. Issue ishe Workforce One that is ongoing. It is not new to the covid pandemic obviously. Finding skilled work force has been a challenge f many manufacturers for some time and e manufacturers on the call would age with that. Had been ahat particular challenge and particular concern during the covid pandec is as manufacturers have had to navigate how they keep operations going, one of the things theare really worried about is keeping their workforce. Sen. Klobuchar especially for smaller ones, it is hard. Ms. Stovall absolutely, so they are trying to avoid layoffs at all costs, so we have helped and i know it is not just us, the kansas manufacturing, but others across the network, we have been handson in helping manufacturers, trying to give and others to the ppp resources that are available to and that they can stay open keep their folks employed. Big klobuchar and i am a fan of that. Thank you for the work you do. One last question and i will give this one to mr. Russell. In july, when you testified between before the commerce committee, you talked about the importance of standing up to practices. In the northern part of our state, a large part of the workforce up there. Now, we are going to have a new president coming in who i believe can usher in a more Strategic Policy and go away from the go it alone approach but what could be done to best work with new innovation as we stand up to unfair trade . Thank you for your question. That is the 64 trillion question. All, not move quickly to dismantle what this administration hasut in place. As you noted, there are questions about strateg but that strategy must b based on a longterm proach and not simply responding to the tactics the day. As you know clearly, overcapacity in steel,luminum, fiber optics and 15 or 1other industries, mostly caused by inas economic policies is what is threatening so Many Industries. We need specific disciplines that are eorceable andhose need tbe done in a multilateral setting. We have not had enoughupport from our allies and partners i the past. Weve had, as you know, the they now forum understand america is serious about addressing unfair trade. We want to do so with senator support and in cooperation and i believe congress is going to be withong bipartisan partner the Incoming Administration to do that, but no one should be confused by americas resolve to support our producers and our workers. That is steadfast. The question is what the longterm strategy is. Sen. Klobuchar vy good. Thank you, mr. Chair. File now recognize senator baldwin. Wessel, imwin mr. Going to ask some questions, but i also want to note for the record, as ive been shuttling back and for to the floor to take votes, as sometimes happens, there may have been things thayouve tackled already but that is ok. We are nine months into this hearing and im still on a routine basis from wisconn Health Care Workers who cannot get aeliabl supply of n95 masks, that they need to protect themselves and provide and for their patients, that is absolutely unacceptable in the United States of america. Began, ivendemic been calling on the trump administrati to use the full power, all the power of the defense production act to alleviate these supply shortages including the shortage of the ppp that are essential workers need. Far, it imy observation the Trump Administration has only used it sporadically, well short of its full potential, failing to use all the toolshat are available under the defense producti act. Also, ive been concerned supposedly pa contract have gone middlemen and when priority oers were issueto major u. S. Companies under title i,hey failed to utilize the full wght of the u. S. Government backing to incentivize these companies to truly expand their expanding capacity. Wouldsioner wessel, what it have meant and what would it mean Going Forward to fully unlock the power of the defense production act, specifically from a manufacturing perspective . Ms. Stovall thank you for your question, senator. Also, thank you for your leership on this issue. You have helped provide some Critical Thinking and policy apoaches to addrs this issue. I think it would havbeen in measurably an accomplishment to firsturable measure responders and patients, avoiding sickness. If we d utilized dpa withtively, quickly, accountability and transparency. It is not only about getting the funds, which you havbeen a lead. There was no accountility and no transparency as to where contractwere going for production or where e products and thatg deployed, needs to be fixed. We need legislation to make sure that never hpens again. I appreciate that. I will note that in may of this the medicaloduced supply transparency and delivery act with my colleague, senator murphy, and others, which does lay out a framework for byective covid19 response federalizing and adding critical oversight and transparency to the supply chain for critical medical supply equipment. It also unlocks the full array of authorities under the defense production at. I certainly hope that when president elect Biden Takes Office in january, that he will use executive action to implement this framework and unleash that power as we will still have work to do. I know i have just a few seconds left, but the Trump Administration claims to asoritize Economic Security a National Security issue. In 2018s oped in real clear politics said we are in an era of intense economic competition and that into this breach comes donald trump with a new organizing principle for Strategic Policy. Economic security is National Security. Dhspril, acting director of chad wolf tweeted that Economic Securityis homeland and has made similar statements and testimonies to congress. Whe pushlaborate comes to shove, it was a lot of talk and little Action Economics view of and National Defen policy is extricably linked, President Trump has failed to underpin his economic policies with a National Security concern. Can you elaborate on howhis failure put us in a sategic disadvantage in relation to Great Power Competition with china . Ms. Stovall that is a mr. Wessel that is a great question and a potentially long answer, but i will shorten it. Inextricablyts are intertwined and workers in the state provide countless benefits for making sure we support a strong economy, that we are able to support industry, critical industries, critical infrastructure. Their interests, their abilities support america while it has been undermined by chinas noneconomic predatory policies over a long period of time, but the impact of those is accelerated as china has passed its industrial policies, made in plan 2025, its fiveyear which will be updated in march. We have seen tactics applied to chinas policies, but not a longterm strategy to address the overall problems. Supportedhich i have are not a longterm strategy. To multiply our responses, make sure they are sustainable, and we need to make sure we have the ability to compete on a level Playing Field. It is an all of the above strategy that needs a coherent framework which we join with our allies on and where congress is a true partner. Sen. Baldwin thank you, commissioner. I yield back. Senat rosen is the last senatori think, to be able to question our witnesses and we need to conclude our hearing shortlthereafter. This Committee Room is to be occupied again and in preparation to do so, heeeds to take place soon. Thank you, mr. Chairman. I want to thank everyone here for being here. My colleagues have already asked about reef workforce traini and retraining because during this pandic, American Ingenuity has spot a many have the ability to tack these insurmountable problems. For example, when the pandemic a nevada, they started maki fay shields and participant partitions for casinos and agencies. The cent teamed up with our downss center to produce for local health ce workers. This august, i had the opportunity to virtually visit crchill county. They make urbon and they. Hifted to Hand Sanitizer the henderson arean las vegas, switched to produce Hand Sanitizer. I want to thank you f addressing some of the challenges we he doing this r ppe and some of the other things because you know having a Skilled Workforce that is able to be nimble and adapt is going to impact how we deploy our businesses but i want to build believebecause i also we have to build Consumer Confidence if we are going back indoors. We are worried about the quality of our air. Indoor air quality, going to restaurants, arenas, concerts, hotels andasinos. , in your experience working with small and meumsize manufacturers, do you know of companies th are working to produce these portant types of hepa filters and Filtration Systems thawe will need, electronic air cleaners that will jumpsta the ecomy and makconsumers more confident to go back indoors after the pandemic . Ms. Stovall tnk you for the question. Yes, as a tter of fact. In your comments, you referenced ingenuity and the ingenuity of manufacturers, manufacturing is built on innovation. We are a count of makers. We make things. This that wes like have critical needs, needs that may be a little different than they were six months prior to that, that companies are looking to say, how c we do better at meeting the need . That is where innovation comes from and companies are doing this on their own. I keep pulling that out because i want you all to understand the whatr investment, the manufacturers are doing on their own and what we need to be ample to do to support them. To your question, are there companies that are looking at Indoor Air Quality, absolutely they are, because that is a need. Ile we are looking at whatever needs right now, masks, ventilators, those kinds of needs, we e also looking at what gets us back to some sense of normalcy, right . What will make the public comfortable wioing into buildis and into retail spaces and Office Spaces . Is an increased focus on air quality so yes, that is something being looked at by manufacturers in kansas and across the country. Sen. Rosen i thank you for that. I would like topeak more about that, buthere is another committee coming in now, so i will submit those questions for the record. I think it is really important we tk about Indoor Air Quality and getting back to sports and school and all of the things that we do. I will yield back my last few seconds and i thank you all for beg here today. Sen. Moran thank you for your participation today. Are just about to conude this hearing, but it is my practice to ask any witnesses if they have anything they want to clarify something they wish theyould have been asked, something they wisthey would have said. Very good. Thank you all for joining us this afternoon. This is a very impornt topic, and we need to figure out the policies that are necessary to strengthen and grow our manufacturing economy, creating jobs in kansas and the United States, but also as a way to protect citizens from a pandemic and other emergencies and crises that will occur by havi access to various manuftured products that are necessary for our countrys wellbeing, health and ecomic. Yes, sir . Mr. Chairman, i ne that neil gilman is back on the line. I wa him to know i was bragging about him. I want to say toim how much i admire what he has done and all the entrepreneurs and manufacturers on thisall. I think this hearing has really been ver inspiring to see the kind of ingenuity an creativeness and innovativeness which is really the hallmark of america. They canxploit intellectual property, their workers, and try to undercut but in the long run, our system will beat theirs and we will be safer in terms of our health care and our economy because o the patriots thawe had at this hearing today. You and i had a ance to talk youre floor and i think leadership he has been very important. You and i can Work Together in continuing showing how a theseuring P Health Care supplies are so important to our country so my thanks to you for this hearing and to all of our witnesses. Thank you for your assistance, leadership, and i look forward to continued efforts in pursuing this topic and others in the subcommittees jurisdiction. The hearing record will remain open for two weeks. Senators are asked to submit questions for the record. Upon receipt, the witnesses are requested to submit their written answers to the committee as soon as possible. Hearingcludes todays and i think our witnesses, our staff, and apologize for the on again, off again nature of todays hearing through no fault of anyone in the rooms efforts. We had a disjointed chance to have testimony told but it was compelling and useful and i am grateful f that. With that, the hearing is adjourned. [gavel] and brought to you today by your television provider