Medical molders not immune to COVID impact

The thought that companies making products for medical have been immune to the downturn brought on by the coronavirus pandemic isn't entirely accurate.

While many plastics firms that focus on the medical industry have seen strong business throughout, there are some that work in areas that were hurt by COVID-19. For example, some processors making components for goods used in elective surgery saw that business drop precipitously early in the shutdown, as people were urged to stay away from hospitals unless absolutely necessary.

Mark Rathbone, founder, owner and CEO of PTI Engineered Plastics in Macomb, Mich., said he always thought his company was pretty much bulletproof because 70 percent of the business is medical.

"But the medical we provide is considered to be elective-type surgeries," he said. "So when you're getting a colonoscopy or a catheterization, or some type of laparoscopic surgery, they were all kind of put off."

Because of that, PTI's business fell off in this area, causing a 25-30 percent decline on the manufacturing side of the business, according to Rathbone.

The company was involved in the ventilator venture between General Motors and Ventec Life Systems, and it also developed a face shield with a visor strap.

"We put together a tool package and turned it around in six to seven weeks ourselves," Rathbone said. "We started manufacturing it, and from the end of March until August we made over 150,000 face shields and donated them to first responders, municipalities, food bank people, people working with people in need."

PTI now has gotten to the point where it started selling the face shields on the open market for a price of $7.50, so he said that, not counting efforts in making the tooling, the firm donated about $1.1 million worth of masks.

The firm was deemed essential early in the crisis, but Rathbone said some staff — the firm employs 350 — felt vulnerable and wondered why they were working when other businesses had to shut down.

But between the ventilator and face shield projects, he said it helped the employees feel good about what they were doing.

"We started putting some banners around and some Rosie the Riveter posters," he said. "Everybody kind of got the fighting spirit, and doing the face shield project was really good for the morale of our employees."

Buoyed by a payroll protection plan loan, the PTI CEO said most workers were kept on, though some were furloughed with benefits, primarily older workers considered to be more at risk. There still are a few people working from home, while others took Family and Medical Leave Act time to take care of family members.

The manufacturing part of PTI's business still is down about 15 percent from where it was previously, but Rathbone said some forecasts put the firm close to pre-pandemic levels by the end of the year.

On the tooling side of the firm, however, business still is at a depressed level. The tool room, he said, remains down about 25 percent, and the 50 people on staff are working reduced hours.

"There is a lot of business we're told we have," he said. "Some gave us purchase orders as placeholders for business but have it kind of on hold. We know we have it, but we don't know when, and several are big packages. Those are all medical-related. We're working on quite a few drug delivery packages."

Rathbone himself tested positive for COVID-19 in late June.

"To me it was like the flu times two or three," he said. "It lasted about seven days. I didn't have to be hospitalized. It just kind of ran its course, and I didn't have to take any extra medicine."

Four total people tested positive at the facility, and all came through it well, he said, with nobody having to be hospitalized.

Cascadia Custom Molding, with one facility in Seattle and another in Idaho, normally does $35 million a year in business, but because of the pandemic, sales are off about 20 percent, according to Chairman Dale Meyer. Medical and aerospace are its dominant markets.

The custom molder also was involved with the GM-Ventec project and had a few medical-related customers that gave it increased business early in the crisis.

"In medical, we had three customers during COVID-19 that did very well," he said. "One was making ventilators, one was making patient monitoring devices and [the third was also] making ventilators. All obviously had tremendous amounts of business, but that has slowed in the last couple of months."

On the other part of the medical equation, though, Cascadia makes cases and holders that go around medical equipment. A number of its customers make items used in elective surgery, and that went to zero, though it's starting to come back, Meyer said.

Its aerospace business didn't drop to zero, but it was close, he added. The good news on that front is reports that Boeing might be ready to resume production of the 737 Max airplane that has been grounded for more than a year.

"We're starting to see some of that already," Meyer said. "I think the Tier 1 people are starting to build up inventory in anticipation of release of that aircraft."

Another smaller area for Cascadia that saw business fall drastically earlier in the year was the products the firm makes for exercise equipment, because all the health clubs had closed.

"The company we deal with has a much higher percentage of their equipment go to health clubs because they're a high-end product," Meyer said. "But we now see quite a pickup from them as they're moving to home units pretty aggressively."

Overall, Cascadia is starting to see a slow increase in orders and backlog, but it doesn't appear to be turning very quickly, the chairman said. "Obviously, we need aerospace to pick up for us to get back to normal. At this particular time, I'm not predicting to get back to pre-COVID levels until probably 2022, or maybe late 2021."

The medical business is now steady, with the three customers that saw orders boom early in the crisis all still running at a pretty decent rate.

Cascadia kept operating throughout the pandemic except for a couple of weeklong shutdowns. Meyer said the firm has had no positive tests for COVID-19 within its facilities, and it continues to adhere to a strict cleaning protocol at both sites.