Troy, Mich. — Automotive plastics supplier Cadillac Products Inc. is investing millions of dollars into manufacturing hospital gowns in hopes of turning a charitable pandemic pivot into a full-fledged business unit.
Its newly launched health care subsidiary, ProTEC-USA, has donated nearly 1.2 million gowns since the COVID-19 pandemic started in early 2020 but has yet to land a paying customer. Its executives, however, are banking on sustained demand for local personal protective equipment after the pandemic exposed the United States' reliance on China for hospital supplies.
At the auto supplier's 62,000-square-foot plant in Troy, around two dozen of the company's 225 employees have a hand in making gowns at any given time. Around 10 are devoted full time to running the new $1 million gown-making machine, which sits in a 5,000-square-foot area carved out for ProTEC. The machine was built in-house and is capable of producing 2 million gowns each year, said Mike Williams, vice president of operations and purchasing.
At a sale price of $1 apiece, which Williams said is competitive with offshore sourcing, that would create $2 million in new revenue for Cadillac Products, or around 5 percent of overall revenue for the company.
"I've got a goal. I'd like to diversify our business outside of just automotive products," Williams said on a recent tour of the plant for dignitaries and media. "If I could get this to 25 to 30 percent [of overall revenue], that would be great."
Plastics News placed Cadillac Products at No. 104 in the most recent of North American film and sheet makers with an estimated $40 million in annual sales in the region.
The nation's supply of PPE was quickly depleted when the pandemic hit. Then supply from China, the world's largest exporter of PPE, was shut off. The shortage led to horror stories of nurses and doctors reusing equipment and treating patients without adequate protection.
While the frenzied early days of the pandemic have passed and hand sanitizer and masks now sit discounted on store shelves, many politicians are calling for PPE to be manufactured domestically to prepare for health crises in the future.
"I came into the [Michigan] Legislature and met with so many people who said that our economy is risky because we are so dependent on the auto industry," said state Sen. Mallory McMorrow, D-Royal Oak, who attended the company's tour to laud its "made in Michigan" PPE plan, alongside a few other Democratic lawmakers. "When the auto industry is hit hard, we're hit hard."
That's a big factor in Cadillac Products' desire to diversify. The company is planning to invest another $1 million to build a new machine and double gown production capacity, underscoring its confidence that there is a market for locally made PPE.
The company received a $100,000 grant from the state to help it build the first vertically integrated machine, which pulls plastic sheets made of resin pellets down a line and cuts them into gowns. Before the machine, gowns were cut by hand in a much more laborious process.
Photographs of the machine are prohibited, and it is concealed by makeshift walls to keep proprietary secrets from Chinese competitors, according to the company.