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Illustration: Pablo Delcan
The $32 billion company was known as an icon of manufacturing innovation. Then came the mask shortage?and Trump.
David H. Freedman
Aug 1917 min read
On the evening of April 2, some two weeks into America?s full-blown Covid crisis, President Donald Trump fired off a tweet to his more than 80 million followers:
We hit 3M hard today after seeing what they were doing with their masks? Big surprise to many in government as to what they were doing ? will have a big price to pay!
The notion of 3M ending up square in the bilious crosshairs of the Tweeter-in-Chief would have seemed absurd just days earlier. A staid, 118-year-old, Midwestern manufacturing company, 3M is best known for Scotch tape, sandpaper, and Post-It notes ? it sells enough of them that it pulled in $32 billion last year, and employs nearly 100,000. Unlike the flashy high-tech wizardry radiating from Silicon Valley, 3M was built on made-America-great, meat-and-potatoes innovation. The company owns some 120,000 patents, and sells some 55,000 products. So how did a much-admired all-American sticky-paper company end up being publicly cast as a pandemic villain?
The answer: N95 masks. At the time of the tweet, there was growing public horror over cries from America?s frontline health care workers running out of the N95s that would keep them from getting infected by the flood of sick and dying patients. N95 masks are designed to be discarded after a single patient encounter, but medical professionals were getting infected as a result of relying on the same mask for as many as five shifts, or even sharing the mask with other health care workers. It was still a few months before there would be hard data on the actual number of U.S. health care workers infected with Covid-19 ? by the end of July, estimates reached 150,000 to 200,000, with some 1,300 fatalities ? but it was already clear the country was verging on a massive health care meltdown right at the peak of the crisis.
It turns out the majority of N95 masks in the U.S. comes from one company ? 3M, which developed the first N95 masks back in the ?70s. And inexplicably, 3M wasn?t making nearly enough of them.
Things only got worse for the company. 3M wasn?t merely falling severely short of producing enough of the masks ? press reports indicated the company was sending much of its supply to China. The very country that, to hear Trump and his backers tell it, virtually manufactured the novel coronavirus and shipped it to us. And in return 3M was sending them our life-saving masks. Trump announced he was going to invoke the Defense Production Act to force 3M to keep all its masks here.
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To be sure, Trump?s tweeted ire is a vast and largely indiscriminate commodity that has scorched plenty of other companies during his tenure, including Macy?s, Ford, Merck, and AT&T. But while most of these attacks draw little more than ?he?s at it again? shrugs from the world at large, the attack on 3M got traction. Suddenly, the story was everywhere, and 3M was getting hammered on Fox News. Much of America suddenly wondered how such an iconic company, one that has long been considered the beacon of innovation, could let us all down in such a spectacular way.
3M?s square-jawed, normally limelight-avoiding CEO, Mike Roman, fired back publicly on CNBC, insisting that the White House?s accusations were ?absurd.? Trump?s attack was apparently too much even for the low-key CEO, a former engineer who took the reins in 2018 after 30 years with the company. In keeping with 3M management tradition, Roman had until then steered away from controversy. ?The narrative we are not doing everything we can to maximize delivery of respirators [N95 masks] in our home country, nothing could be further from the truth,? he said in the interview.
The mask fiasco has left 3M with a big dent in the golden reputation it?s been building for more than a century. The reality is, masks are barely a line item on 3M?s balance sheet.
Trump would soon announce his shaming had worked ? he had pushed 3M to get its act together and produce more N95 masks for America. Little more about the blowup would be said publicly, leaving the widespread impression that 3M had initially failed us when it came to supplying this suddenly precious and critical resource, but then got to work to close the gap.
Those were the optics, but not the reality. The charges that 3M was unprepared for a spike in N95 demand, and too beholden to China, were a cartoon version of a much more complicated picture. At the same time, the notion that 3M has gone on to solve the N95 problem is pure fantasy. The extreme shortage of N95 masks is ongoing and is one of many reasons the pandemic is raging on with no clear end in sight. The shortage could well become catastrophic during a pandemic second wave this fall or winter.
Like millions of other U.S. businesses, the pandemic has not been easy on 3M. The Saint Paul, Minnesota-based corporation has seen demand for most of its products plummet in a rapidly contracting economy, crushing its revenues. But while many of those other companies are seen as victims, the mask fiasco has left 3M with a big dent in the golden reputation it?s been building for more than a century. The reality is, masks are barely a line item on 3M?s balance sheet. Up until the pandemic, N95s only accounted for less than 1% of the public company?s $32 billion in annual revenues. But when you take on the risk of having a product in your portfolio that has the potential to become the lifeline for the country overnight, you better be ready to step up to the occasion. It might only be a fraction of your business, but it?s your entire reputation on the line.
In mid-January, Michael Osterholm, a University of Minnesota researcher who heads the school?s Center for Infectious Diseases Research and Policy, contacted 3M to urge them to start making more N95 masks. There were no known U.S. cases of Covid-19 at the time and only dozens of known cases anywhere in the world outside of China. The World Health Organization was still nearly two months away from declaring the disease a pandemic. It would be a full half-year before the president of the United States conceded that mask-wearing was a good idea.
But Osterholm was among those experts who could see what was about to come, and the resulting surge in demand for N95 masks. 3M listened to Osterholm, and immediately started ramping up its production.
Headquartered in the Twin Cities, 3M built its multibillion-dollar business and its solid reputation around innovation in common industrial products that require tricky, complex manufacturing processes. It wasn?t like the electronic-chip or blockbuster-drug complex, where breakthroughs come from Nobel-Prize-winning scientists. No, this was the sort of midlevel complexity that calls for a team of industrial scientists laboring in obscurity to come up with a way to make a better adhesive or abrasive ? two of 3M?s biggest products. (Or, famously, a worse adhesive: Post-It notes were dreamed up by a 3M scientist in 1974 who realized the disappointingly semi-sticky glue he unintentionally developed might actually have a use.)
In spite of their low-rent look and feel, N95 masks are precision instruments compared to the cloth masks we?re now all buying from Etsy or The Gap (or the hundreds of other brands now selling them).
The company has retained its image as an innovative but stolid source of utilitarian products that mostly come in tubes or rolls ? think caulk or Scotch tape ? and that while rarely dazzling, tend to be perceived as being at least a bit better than its competitors? versions. ?It?s an old-school science-and-technology company whose products are high-quality, and more expensive than its competitors?,? says John Inch, a senior analyst at research firm Gordon Haskett Research who follows 3M. That sturdy but somewhat unglamorous profile hasn?t exactly made 3M a darling of Wall Street, Inch says, noting that the company?s stock has been declining from a high of $259 in early 2018 to around $165 today ? though he adds the drop has been partly driven by a lawsuit over alleged contamination of Minnesota water supplies with perfluorochemicals tied to 3M plants, which the company settled in 2018 for $850 million.
3M?s N95 masks in some ways typify the company?s moderately innovative, modestly complex, but highly regarded products. N95 ?respirators? ? a technical term for a mask that provides a higher level of protection than ordinary masks ? are made from cloth-covered plastic. They feel cardboardy and flimsy, but unlike floppy surgical or fabric masks, they hold a distinct, muzzle-like shape. They?re about as cheap as they feel, going for $1.75 retail in the small quantities in which they?ve long been sold to the public, and while bulk health care prices are a well-kept secret, they?re likely quite a bit lower, at least in normal times. In frontline high-risk health care use with infected patients, the masks are meant to be used for a single patient encounter and tossed. But in less-high-risk health care uses, as well as in the painting and dusty construction work that, until the pandemic, accounted for 85% of the market, they can be good for eight or more hours of total wear before they start to clog, making it difficult to breathe.
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In spite of their low-rent look and feel, N95 masks are precision instruments compared to the cloth masks we?re now all buying from Etsy or The Gap (or the hundreds of other brands now selling them). Cloth masks can protect others, by catching most of the tiny, potentially virus-carrying droplets that an infected wearer might blow out while breathing, speaking, or coughing. But they don?t do much to protect the wearer from others who are maskless, because someone else?s expelled virus can zip right through the fabric, as well come in through the gaps.
Not so with the N95. They?re tested to block at least 95% of virus-sized particles in either direction, and when properly worn, sit tight against the face with no air gaps. Simply put, they are the closest thing to complete protection against infection and are considered absolutely essential for health care workers and other critical frontline workers at high risk of exposure.
(For the record, there are other types of masks that riff on the N95: KN95s, which mostly come from China, are supposed to offer similar protection, but aren?t certified to that effect. 3M?s N100 offers a slightly higher level of virus filtration, at higher cost. ?Surgical N95? masks, also made by 3M, are another more-protective version of the N95, designed to also protect against spraying fluids, namely blood. Some N95 masks from 3M and others incorporate a half-dollar-sized valve that makes it easier to breathe out, but also lets viruses escape.)
3M practically invented the N95 mask. Around 1970, the U.S. Bureau of Mines and the National Institute of Occupational Safety and Health (NIOSH) came up with an ?N95? standard that a mask would have to meet to earn that designation. In 1972, 3M became the first to figure out how to make a low-cost mask to meet it, drawing on its expertise with pliable, plasticky materials that had until then been used mostly for gift ribbons and bras. (The earliest versions of the masks weren?t all that different from a single bra cup.) Other companies ? most notably Honeywell and Prestige Ameritech ? would go on to make fairly similar N95 masks. But for five decades, 3M has dominated the market, shipping 30 million masks a month to health care and industrial supply companies as well as home-improvement retailers before the pandemic. (For comparison, Honeywell ships around 1 million.) Even so, masks are a blip in 3M?s business.
The design, performance, and manufacturing processes behind the masks have been upgraded extensively over the years. For the past two decades, that?s happened under the watch of Nicole McCullough, a PhD occupational health scientist who is now the company?s head of global safety. Some 300 3M scientists and technicians work under her direction on 3M?s personal-protection products, which include everything from safety glasses to anti-slip tape. But masks get an outsized share of attention, says McCullough, noting that an entire lab at the company is devoted just to constantly test and improve the fit of the mask to ensure it seals tight against a variety of face sizes and shapes. ?It looks like a simple device,? she says. ?But it?s full of technology.?
In January, after getting the call from infectious disease researcher Osterholm and consulting with other experts, 3M immediately committed to doubling its production of masks to 60 million a month. By mid-April, it would commit to quadrupling it.
3M could promise that sort of dramatic ramp-up because it had, in recent years, taken steps to prepare for a sudden pandemic-driven surge in N95 demand. It was an effort undertaken after the SARS outbreak of 2003. That outbreak was tiny compared to Covid-19, killing less than 800 people worldwide and infecting only eight in the U.S, but public fear of a wider outbreak drove a spike in N95 demand. That?s when 3M started paying attention.
To gear up for the next potential health crisis, 3M purchased the ?melt-blown polypropylene? material and the huge, complex machines required to produce the masks, and put it all in mothballs. It also trained more technicians on the equipment and processes. While almost all other U.S. manufacturers of N95 masks were shifting their N95 production to China, India, and other countries where costs were lower, 3M kept its biggest N95 manufacturing lines in the U.S., in South Dakota and Nebraska, recognizing that in a serious outbreak, overseas pipelines might dry up.
?A lot of us were exhausted. We had to make room for crying time.?
These moves flew in the face of generally accepted good business sense, says Kyle Goldschmidt, a researcher at the University of St. Thomas in Minneapolis who studies supply chains and follows 3M. ?Investing in spare tooling and materials for emergency capacity provides no value to the company,? asserts Goldschmidt. ?Almost all companies focus on lean practices, taking all excess capacity out of the supply chain. 3M added it in.? 3M?s approach may not have made much business sense, but it would be vital in a pandemic.
So when Covid-19 started to have the makings of a pandemic, 3M was ready to hit the gas. It added shifts and overtime to its plants worldwide to get to 24/7 operation on its lines, pulled the tarps off its extra equipment and materials, and moved hundreds of employees over to mask production. When it started running out of people it could shift over or hire, it began purchasing robots to pitch in. Its researchers studied ways to sterilize masks for reuse. It even successfully pushed the federal government for fast changes to regulations that would have prevented the company from diverting shipments of N95 masks earmarked for industrial use to hospitals. For weeks McCullough and other managers and researchers leading the emergency ramp-up were waking multiple times a night to answer urgent calls and texts from 3M plants around the world. ?A lot of us were exhausted,? she says. ?We had to make room for crying time.?
When the pandemic exploded in New York City and other hot spots in March, the company began airlifting and hand-delivering mask shipments to hard-hit hospitals, moving as many as half a million masks per day. But it wasn?t enough. As the crisis sharply worsened, more hospitals started running out of the masks, and of other protective gear. There was nothing else 3M could do to make masks any faster. The machines that make them are complex, and getting more of them would take months. The world?s supply of melt-blown polypropylene, difficult to obtain on short notice in the best of times, dried up overnight.
Then came the president?s tweetstorm and his threats of invoking the Defense Production Act to keep masks here. 3M had been sending masks to China, reportedly in quantities somewhere ?in the millions.? In January, when the company first started kicking up production, it contracted with Chinese authorities to send many of the extra masks it was making there ? because that?s where the pandemic was at the time. It did so with the full blessing of the Trump administration. In fact, for more than another month the administration continued to encourage all U.S. medical-supply companies to ship more goods to China because of skyrocketing demand there. At the end of February, the Commerce Department helpfully issued a guide for medical suppliers on the best way to do it. Some $16 million worth of masks and other medical personal protection equipment were shipped to China in February by U.S. manufacturers, including 3M.
When the pandemic took hold in the U.S. in March, 3M started winding the shipments to China down, but hesitated to simply shut them off. For one thing, 3M runs an N95 plant in Shanghai and didn?t want to risk losing access to it. China is also a key source of the raw materials used in the masks and of a variety of medical supplies. By April 3, 3M announced it was importing 10 million N95 masks to the U.S. from its factory in China, likely far more than 3M had sent there.
Within a few days Trump backed down, though characteristically dressing up his retreat as a victory. Rather than invoke the Defense Production Act against the company, he said, he had wrung a commitment from the company to increase U.S. mask shipments ? ignoring the fact that the company had started doing so more than two months earlier, and that under the new ?agreement? 3M would continue to fulfill its contractual obligations to China.
Clearly, 3M deserves some credit for a fast response to the initial disastrous shortage of N95 masks. And there are plenty of others that share the blame for this crisis, starting with the federal government. Congress funds a national stockpile of personal protective gear for health care workers to the tune of $600 million a year, and by 2009 had built up a store of more than 100 million N95 masks. That sounds impressive, but the CDC has estimated that a major pandemic like Covid-19 calls for some 3.5 billion masks per year. Even worse, after 85 million masks were distributed from the stockpile during the 2009 H1N1 influenza pandemic, no effort was made to restock even that inadequate supply.
The bulk of 3M?s business has actually suffered under the pandemic, with overall sales falling 13% in the second quarter.
When Covid-19 hit, there were 17 million masks in the national stockpile ? and 5 million of those were past the masks? five-to-10-year expiration dates, which are set because the rubber head bands deteriorate over time. When Trump finally realized he had to act to address the shortage, his main action besides trying to blame 3M was to put his son-in-law, Jared Kushner, in charge of finding more masks and other critically short supplies. Kushner, who has no health care, manufacturing, or supply-chain experience, bungled the job, throwing tens of millions of dollars at companies owned by Trump supporters who delivered little in return.
To be fair, the U.S. has never had a strong centralized public health system as most countries do, relying more on state and local public health agencies. But few state agencies have maintained significant stockpiles either. That means the country has left hospital systems on their own to maintain the stocks of masks and other equipment needed to face an epidemic. Did they? Let?s put it this way: Massachusetts General Hospital in Boston, Harvard?s flagship teaching hospital that?s universally considered to be one of the top few hospitals in America, as well as one of the best-funded, had a mere week?s supply of N95 masks just days into the pandemic?s initial flare-up in March. Most hospitals in America were less prepared than that.
The reason hospitals failed to even minimally stock up on masks, says St. Thomas University?s Goldschmidt, is that unlike 3M, hospitals and hospital-supply distributors insist on hewing to lean supply chain practices ? safety be damned. ?They focus on keeping their inventory costs low,? says Goldschmidt. ?They?ve prioritized profits over preparedness.?
But, as the premier manufacturer of N95 masks in the U.S., there?s plenty more 3M could have been prepared for: It would have had a good handle on how woefully low the government and health care industry N95 inventories were. It would have anticipated that if a pandemic exploded demand for the masks, all eyes would have turned to the company to meet that need. And it would have known that quickly doubling and even eventually quadrupling production wouldn?t come close to solving the problem.
3M wasn?t helpless; it could have pushed the government and hospitals to store more masks, it could have built up even more excess capacity, or it could have simply just gotten out of a business that barely contributes its bottom line while carrying the risk of big reputational hit. The mask shortage may not be 3M?s fault, but unlike the inconvenience of a pandemic-induced toilet paper shortage or flour shortage or bike shortage, it carried a much heavier burden ? preventing the shortage of a life-saving item.
As Covid-19 rages on, 3M will almost certainly remain by far the U.S.?s largest manufacturer of N95 masks. But even with the massive ramp-up, the masks still aren?t likely to account for more than 3% of the company?s revenues, even at peak production. Meanwhile, the bulk of 3M?s business has actually suffered, with overall sales falling 13% in the second quarter compared to the same quarter last year. Steep pandemic-driven declines in the airline and car industries wreaked havoc on the company?s bread-and-butter abrasives and adhesives business. With many offices closed and schools shifting to remote learning, there isn?t as much demand for Scotch tape and Post-It notes. Ironically, even 3M?s overall health care sales have fallen in the midst of this enormous health crisis. While the demand for masks and other protective equipment has spiked, sales of most of its bandages and IV connectors and dental materials have withered under the steep drop in all but essential medical and dental procedures.
In the past six months, the mask-manufacturing industry has steadily ramped up N95 output, with the sector expected to continue to grow its revenue by 23% per year over the next five years, according to one estimate. 3M alone is on track to produce 2 billion masks this year, more than half of which will be made in, and thus will be sure to stay in, the U.S. Honeywell is building up to a 250-million-masks-a-year capacity. And new manufacturers, like Miami-based Maskco Technologies, are springing up. Along with partners, Maskco has bought 56 Chinese N95-like mask-making machines capable of producing nearly a billion masks per year (they can?t be called N95 masks until they?re thoroughly tested by NIOSH and approved by the FDA). ?I already have purchase orders in hand for my first two years of production,? says CEO Scott Weissman, an investment banker who founded the company in April in response to the pandemic.
The enormous ramp-up in mask production may not do all that much for 3M?s bottom line, but far more important, the resulting higher capacity from all this activity should be enough to see most hospital workers through the pandemic. Unless that is, there?s a massive, sharp spike beyond any we?ve seen so far, which unfortunately remains a distinct possibility, given the U.S.?s track record.
But what about the general population? It was taboo in the early months of the pandemic for health experts to publically sing the praises of N95 masks while their supply remained dangerously short of what health care desperately needs. But as the shortages ease, more are speaking out about what a plentiful supply of N95 masks could do to keep people safe as they mingle with the maskless masses.
Writing in the Harvard Business Review in mid-June, two Harvard Medical School physicians and two other health and policy experts explained that N95 masks ?would give people control over their own safety, a greater incentive to wear them, and the confidence to resume economically important activities. If worn widely enough in crowded and indoor settings where most transmission seems to occur, these masks could potentially stop the epidemic altogether.? In a July opinion piece in USA Today, two intensive-care specialists put it this way: ?How should individuals protect themselves from infection in areas where near universal indoor mask use is not the norm? In such a situation, the best option is to wear an N95.?
But that?s not an option right now ? there?s no scenario under which N95 masks would become plentiful enough in the coming months to permit widespread distribution to the general population, and the U.S. will likely be struggling simply to keep health care workers safely stocked up for at least a year.
3M, meanwhile, will become a case study on how creating a potentially life-saving product can become your biggest liability in a crisis. ?3M has taken the bulk of the blame,? says University of St. Thomas researcher Goldschmidt of the N95 shortage. ?It?s a little unfair, but the finger always has to point somewhere.?