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Trump Invokes Defense Production Act Against 3M Over N95 Masks

By Rich Duprey - Apr 3, 2020 at 10:58AM

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He wants more respirators for use here in the U.S. than abroad.

Although 3M (MMM 0.86%) is ramping up production of its N95 respirators, President Trump apparently believes too many are still being manufactured for other countries when U.S. healthcare workers are facing a shortage. As a result, the president invoked the Defense Production Act, which would compel the company to prioritize mask production for the U.S. government. 

He subsequently tweeted, "We hit 3M hard today after seeing what they were doing with their Masks. 'P Act' all the way.' Big surprise to many in government as to what they were doing-will have a big price to pay!"

A doctor wearing a mask and face shield

Image source: 3M.

3M responds

3M is producing 35 million respirators a month in the U.S. while boosting its global output to more than 1.1 billion annually, or some 100 million per month. In addition to its U.S. factories, it also has plants in Europe, Asia, and Latin America. 

Earlier this week, CEO Mike Roman said his company is looking to double production again to 2 billion respirators globally over the next 12 months with the capacity to achieve that coming online in the next 60 to 90 days.

"In the United States, we expect to be producing N95 respirators at a rate of 50 million per month in June, a 40% increase from current levels," Roman said.

The White House, though, is looking for most of 3M's production to be used for the U.S., which recently surpassed China to become the country with the most confirmed cases of COVID-19, the disease caused by the coronavirus.

3M, a leading manufacturer for supplies in Canada and Latin America, however, said there are global humanitarian issues to consider before directing most production to the U.S. Moreover, the company said on its website, other countries may retaliate and stop sending their supplies to the U.S.

Rich Duprey owns shares of 3M. The Motley Fool recommends 3M. The Motley Fool has a disclosure policy.

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