McIlvaine Coronavirus Market Ale

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Economic nationalism is not sustainable according to Gary Gereffi, director of the Duke University Center on Globalization, Governance & Competitiveness. “National economies can’t be self-contained industries. They have to tie in to other parts of the world. We can re-think relationships, but we need to find a partnership model,” he said back in 2017.

“Frequently a US company is dealing with international production networks where the assembly of finished goods is moved offshore, while key components or subassemblies are provided from the US,” said Gereffi. “Running a company like that means knowing how to manage global supply chains involving a variety of firms. Many US companies that initially focused on making everything at home have no idea how to manage this form of coordinated production where cross-border logistics need to be very precise and the financing is decentralized. Also, even if the same companies that left the US now return, they are likely to bring back far fewer jobs than before because production was probably more labor-intensive in the earlier period.”

Raising tariffs on imports could have negative ramifications on the US (as well as the exporting country). Many companies have set up regional and global production networks to make finished products using a large proportion of imported parts. Case in point: a car has about 30,000 distinct parts and an iPhone has hundreds of parts, many of which are not available in the US supply chain.

“If you try to raise taxes on all the inputs that are made in different countries, you’re not only affecting the parts producers abroad, but also the final goods producers in the US,” explained Gereffi. This is true for the US automobile industry, where 40 percent of the $20 billion in auto parts imported from Mexico are US-made parts and components.

While economic nationalism is not sustainable, Gereffi believes that actions need to be taken to support those who might view themselves as impacted negatively by globalization. In industrialized nations, the most vulnerable groups often are workers whose skills and experience are rendered obsolete by new technology at home or low-cost imports from abroad.

“Globalization creates winners and losers and in the United States we don’t have a strategy for the losers,” he said. “How do we re-build workforces among certain industries? We haven’t paid enough attention to this.”

Gary has recently addressed the question as to whether the specific circumstances of the COVID 19 crisis change the views about economic nationalism. In a phone call today with McIlvaine he pointed to the fact that China is again a major exporter of meltblown media and masks to the U.S. He is asking whether in the future a reshoring policy for critical items such as meltblown media and masks will be necessary for national security reasons.

In an article appearing in the Journal of International Business Policy Gary analyzed the exports of various countries prior to the pandemic.

The market shares in exports had changed in the 2008-2018 period. Traditional exporters such as the U.S. were surpassed by nontraditional players such as Vietnam.

Gary points to the spectacular production expansion of meltblowns in China in the first few months of the pandemic. He asks why the U.S. could not have acted similarly. Sinopec was the company responsible for the biggest increase in meltblown production. They are one of the world’s largest energy and petrochemical companies and were therefor capable of quickly building melt blown lines to produce 12 million tons per day of media. Without government funding no company in the U.S. would take the risk of such a large increase in capacity without assurance of a long term need.

McIlvaine answered Gary’s question about a future solution and with the following. The U.S. could quickly ramp up to produce large quantities of masks but not to produce large quantities of meltblown media.

Fortunately meltblown is only one medium for masks. Membranes and nanofibers can also be utilized. The present U.S. production of media which could be used in masks is very large compared to what is needed in masks. The following chart shows the type of media by end use. Even with a huge increase in mask production in 2022 to $25 billion worldwide the media use would not equal that of the other industries combined.

This is not the full story. In fact if the U.S. and other nations used Comfortable, Attractive, Tight Fitting, Efficient (CATE) reusable masks each square meter of media would be 90 times as effective as if used in a disposable mask. One reason is that it would be used 30 times instead of once. Also because of the tight fit it is

three times more effective than a loose fitting N95 mask. The CATE mask advantages can be summarized

McIlvaine has asked Gary to keep us informed of his activities in this area so that we can report them. You can see his complete COVID analysis at:

Sales of air purifiers in many Indian cities such as new Delhi are rising rapidly. Panasonic has seen a fivefold increase. Sales are rising for low priced units at around 10,000 Rs and also the high priced Dyson units at 50,000 Rs. Sales at Samsung and Xiaomi are also up substantially.

Scottish Meat Processors Dealing with Many COVID Cases

Operations were paused at one of Scotland’s main meat processing plants earlier this week after a number of its staff tested positive for Covid-19, Scotbeef confirmed the cases at its Bridge of Allan plant and said a phased return to getting the facility up and running was already under way

In a statement, the company said: “In the last few days a number of colleagues working at our Bridge of Allan plant have tested positive for coronavirus and are now self-isolating in line with national guidance.

“We take the welfare of our colleagues very seriously and are working with the relevant authorities to ensure everyone’s safety.

“All appropriate action has been taken and activity was paused on a temporary basis whilst all colleagues were tested.

“We continue to work closely with NHS Forth Valley’s public health team who are providing advice and support to assist with a phased return to full operation over the coming days.”

Scotbeef said since the beginning of the pandemic a range of comprehensive protection measures had been put in place including physical distancing and the use of personal protective equipment (PPE).

The company added: “Frequent inspections of our plants by the relevant authorities confirmed that we have taken all necessary precautions however, given the size of our workforce and the rising levels in the wider local community, it is not unexpected that we would experience some positive cases during the ongoing pandemic.”

The Scotbeef outbreak follows news that a number of employees at another meat plant – Kepak McIntosh Donald in Portlethen, near Aberdeen – had tested positive for Covid-19.

A spokeswoman for NHS Grampian said the health board was working with Kepak McIntosh Donald and other partners to ensure all appropriate control measures are in place within its workforce.

Meat processors trade body, SAMW, declined to comment on the cases but said all of its members had installed extra safeguards to observe Covid-19 rules.

The spread of coronavirus throughout the meatpacking industry, where tens of thousands of workers have been infected in the United States alone, is greatly accelerating plans by major meatpacking companies to introduce automation and robotics into the plants.

Nationwide, at least 48,000 meatpacking workers have been infected and 245 have died. The major meatpacking companies are framing their investments in automation as a humane response to outbreaks in their workforces. Management at JBS’ beef plant in Greeley, Colorado were revealed by two whistleblowers to have deliberately allowed potentially infected workers into the plant and threatened health care screeners who sent symptomatic workers home to quarantine. Even before the pandemic, the meatpacking industry was among the most unsafe, with massive rates of carpal tunnel and other repetitive motion injuries.

Instead, the coronavirus is being seized upon to implement an “Amazonization” of the workforce, using advances in robotics, in the manner pioneered by the online retail giant, to greatly intensify the exploitation of an already low-wage workforce. No doubt a crucial aim is to “thin out” the ranks of increasingly restive meatpacking workers, who have carried out wildcat strikes and protests at several facilities in opposition to the companies’ “herd immunity” policies.

Tyson Foods, the poultry titan of the meat industry, has rapidly increased its investments in automation. Over the past three years, Tyson Foods has invested over $500 million, including the founding in August 2019 of the Tyson Manufacturing Automation Center (TMAC) in Springdale, Arkansas, near its headquarters.

TMAC has been focused on developing automation and robotics for the company production line in order to help improve efficiency. This summer, they tested a robot to perform such tasks as moving chicken breasts from a conveyor belt into tray packs for sale in grocery stores. TMAC’s main focus is the development of an automated deboning system for poultry. The efforts to create and implement “robot butchers” is being sped up, according to Tyson Chief Executive Noel White.

Like Tyson Foods, Canada’s Lesters Foods was forced to close many of its meat-processing facilities early on in the pandemic. Lesters Foods’ president, Henry Mizrahi, sought automation as an alternative to maintain production. Lesters Foods has invested millions in a five-year plan to increase automation, including an initial plan to install robotic arms in one of its facilities capable of moving packages into larger containers for shipping, to reduce the rate at which workers remain in close proximity to one another.

Mizrahi, capitalizing upon the pandemic’s displacement of workers, is certain automation is “worth the expense,” adding, “When we started to see [COVID-19 affect other plants], I saw how tragic the impact was on human health. The pandemic has certainly accelerated our strategy of planning for more robotic equipment.”

Automation, Mizrahi says, will allow “increase food security and improve plant safety.” But in reality, workers are being replaced, not protected. The drive for automation no doubt has the potential to free workers from laborious and life-threatening tasks, particularly during a pandemic, but the result of automation under capitalism is to increase the exploitation of workers through layoffs, speedup and wage cuts.

Meat plants account for $1 billion in global annual sales of automation supplies and services. Georgia-based Cantrell-Gainco, which sells chicken deboning equipment manufactured in Japan’s Mayekawa plant, has fielded double the usual number of inquiries since the coronavirus pandemic hit North America.

Mayekawa, which has manufacturing plants in Brazil, Europe, India, Mexico, Serbia, South Korea, and the United States, issued a statement on global sales stating its chicken deboning robot parts sales are set to rise by more than $28 million from $32 million in 2019 to $45 million this year and $60 million in 2021. This includes North American sales regarding affecting Tyson Foods, Sanderson Farms, and Peco Foods.

In Brazil, the country’s fourth-largest pork processor, Frimesa, has intensified its automation efforts as COVID-19 sweeps the nation, spending R$20 million, or $3.53 million USD, annually. Claudecir dos Santos, Frimesa’s research manager, said that the automation will receive a 5 percent annual increase in funding. Frimesa’s Assis Chateaubriand plant under construction in the state of Parana will include five robots, costing approximately €500,000, or $586,000, each.

Olymel LP, one of Canada’s largest pork and poultry processors, had a plan for automation before the pandemic forced the company to temporarily close its Yamachiche plant for more than two weeks in late March, after nine out of the more than 1,000 workers tested positive for the disease. Upon the facility’s reopening, the company decided to accelerate the plan, which entails the use of robots to sort meat cuts, pick and pack shipments, and stack crates.

Pilgrim’s Pride, a multi-national food company mostly owned by JBS SA, is currently one of the largest poultry producers in the United States and Puerto Rico, and the second-largest chicken producer in Mexico. After exiting bankruptcy in December 2009, it moved its US headquarters to Greeley, Colorado in 2011. The company said in July it will use automation to double capacity of a Minnesota plant to produce chicken sold in tray packs.

Chief commercial officer Henrik Andersen of Denmark’s automation manufacturer Frontmatec said, “The outbreaks of [COVID-19] will put extra spice into the need for automation because the fewer people you have, the less likely you are to suffer from these outbreaks.”

In 2018, the global meat sector was valued at $945.7 billion. It is forecast to increase to $1,142.9 billion by 2023. Production of meat worldwide saw an increase between 2016 and 2018, from 317.2 million metric tons to around 330.5 million metric tons. The world is projected to produce 60.8 million metric tons of beef in 2020, down 922K metric tons from 2019 due to the coronavirus pandemic.

Authorities from the Chinese city of Jinan say they have found traces of Covid-19 on beef, tripe and packaging from New Zealand and a handful of other countries, Reuters reported.

However, Prime Minister Jacinda Ardern says she has been advised it was not a product from New Zealand and officials were investigating further.

Officials say the products and packaging that have been found to have had Covid-19 have come from New Zealand, Brazil and Bolivia, while two other provincial capitals detected it on packaging on pork from Argentina.

"We've been advised that's Argentinean beef, so just trying to get to the bottom of what's been reported there as we speak but rest assured we'll keep doing that," she told Breakfast.

"But to this point I've been advised it's not our beef but we'll keep working away on that."

A spokesperson for the Ministry of Foreign Affairs and Trade told the Herald they have not been informed officially of any coronavirus on New Zealand products.

"There are media reports that the city of Jinan, in China's Shandong province, has detected coronavirus on beef products imported from New Zealand.

"New Zealand has not been informed of this officially by the Chinese authorities.

The packages entered through ports in Shanghai, the city's municipal health commission said.

More than 7500 people who may have been exposed tested negative for coronavirus, it said.

China is ramping up testing on frozen foods after frequently detecting Covid-19 on imported products.

It is not known how Covid-19 got onto the products that came from New Zealand, with a number of procedures taking place before it leaves the country.

Frozen pork cases were also reported in the city of Zhengzhou and Xian. It's not clear if the cases are related.

The World Health Organization has consistently said the risk of contracting Covid-19 from frozen packaging is low.

The role of frozen food and cold temperatures in potentially transmitting the virus was in the spotlight in New Zealand when officials probed the source of a mystery outbreak in August that began with a worker in a cold store facility.

"We do know from studies overseas, that actually, the virus can survive in some refrigerated environments for quite some time," director general of health, Ashley Bloomfield, told reporters at the time.

Having previously stated it's "highly unlikely that people can contract Covid-19 from food or food packaging", the World Health Organization (WHO) reiterated its stance earlier this year.

"People should not fear food, or food packaging or processing or delivery of food," WHO's head of emergencies programme Mike Ryan told a briefing in Geneva in August.

"I would hate to think that we would create an impression that there's a problem with our food or there's a problem with our food chains.

"There is no evidence that food or the food chain is participating in transmission of this virus. And people should feel comfortable and safe."
Meat Industry Association chief executive Sirma Karapeeva said the risk of Covid-19 transmission by food or food packaging was "negligible".

"Advice from the World Health Organization is that transmission by airborne droplets and aerosols is the dominant pathway for Coivd-19 infection," she said.

"We are closely watching and reviewing international developments about transmission and taking advice from the Ministry for Primary Industries and experts at the New Zealand Food Safety Science Research Centre about how we respond to these emerging risks as our knowledge about the virus grows," Karapeeva said in a statement.

Since the early days of the response to Covid-19, the industry had been working to strict protocols that were developed with the Ministry for Primary Industries and provided guidance and a minimum standard for processors for operating.

"The protocol, which is consistent with other industries and guidance from the World Health Organisation, means we have a robust first line of defense against the transmission of the virus," Karaveeva said.

Under the protocol, employees observe physical distancing. In situations where this is not practicable, extra controls are put in place including personal protective equipment, she said. Employees also undergo temperature checks.

Karapeeva said companies are also recording who is working at each site and in which team or bubble they are operating in.