Industry Pulse: Industrial Manufacturing Facilities Battle to Remain “Essential”
In Response to State-Wide Coronavirus Shutdowns, SCL Customers Experience Mixed Results
After Gov. Gavin Newsom called for a statewide shutdown of non-essential business in California in light of the coronavirus (COVID-19) outbreak, many SCL customers in industrial manufacturing found themselves unaffected due to longstanding military, aerospace and medical industry contracts. Others, however, have battled to remain “essential” and able to operate, including breweries that have pivoted to producing hand sanitizer instead of brews.
By the nature of their business, many SCL customers are deemed critical – such facilities that produce components used by the military and supplies for hospitals – but a few, including some producers of niche goods, have been forced to close.
WHAT’S GOOD IN INDUSTRIAL MACHINING
The most positive news out of the industrial manufacturing sector is that most facilities have remained open and operating, even if that has meant finding new ways to do business – from staggering shifts and instituting remote work to creating new products.
“A good portion of our business is metal working business, and everyone there is operating because they’re either dealing with aerospace, military, government or the medical field,” said SCL Industrial Lubricants Consultant Mike Schulze. “We do work with some breweries where the tasting rooms and the restaurant facilities have closed, but they’ve been able to continue operations because they’ve converted their process to manufacture isopropyl alcohol.”
The shortage of hand sanitizer at supermarkets nationwide has caused the price of isopropyl alcohol to soar over 300% in recent weeks, Schulze said.
According to CNBC, “major distillers and brewers including Anheuser-Busch InBev, Bacardi, Diageo, Jack Daniels-maker Brown-Forman and others have launched similar efforts to donate or sell at cost the alcohol needed to make sanitizer under the World Health Organization guidelines.” In San Diego County, Stone Brewery, Kevlar Spirits and Ballast Point are all either manufacturing isopropyl alcohol or hand sanitizer, Schulze said.
WHAT’S CONCERNING IN INDUSTRIAL MANUFACTURING
While many San Diego businesses are tied to government contracts that some say could result in increased business in the near future, that is not the case for all; SCL customers whose brands stand on producing niche goods like guitars, golf equipment and recreational gear are closed.
According to the National Association of Manufacturers, those that have managed to remain open are also “grappling with disruptions to their businesses due to the COVID-19 outbreak, with many anticipating financial and operational consequences.” The organization, which has called on the federal government to further equip manufacturers to handle the coronavirus epidemic, has reported that over 78% of businesses anticipate a financial impact.
In the same vein, there’s also some concern among leadership at companies across the board about whether employees who contract coronavirus can sue for worker’s compensation. “I think a lot of people, in general, are just worried about their facilities closing down and losing their jobs,” Schulze said.
OPPORTUNITIES IN INDUSTRIAL MANUFACTURING
Two clear opportunities have presented themselves since the coronavirus epidemic hit Southern California for SCL customers in industrial manufacturing – the soaring demand for hand sanitizer and the potential to contribute to the treatment of COVID-19 with manufactured products, like gelcaps.
“These breweries and distilleries, they’re manufacturing isopropyl alcohol to disinfect their machines, their facility, and some are using it to manufacture hand sanitizer,” Schulze said. “That’s bringing in money and it’s a way for them to continue operating since it fits with compliance rules set forth by the government as far as providing critical operations.”
On the government front, opportunity also exists in efforts by industrial manufacturers rallying for provisions in a $2 trillion coronavirus rescue package they are hoping will exempt distillers and brewers from paying an excise tax on hand sanitizer production. Many manufacturers are also calling for adoption by lawmakers of a federal designation that deems manufacturing supply chains “essential” in providing supplies critical to America.
Until anything is decided or dispersed, however, SCL customers are falling into one of three categories – those who are operating “status quo” due to government contracts, those that have been deemed crucial but have shifted practices to keep their doors open, and those that are currently closed and waiting for news on when they can reopen.
Contact an SCL Consultant today
In a wide range of automotive, industrial and commercial sectors, SCL remains steadfast on its commitment to product and industry knowledge, performance satisfaction and superior logistics. We protect and optimize the machines that keep our country moving. For more information on how we help can help with services including bulk purchasing or managing inventory, contact an SCL expert today.