Outdoor Research, the Seattle-based outerwear maker, could soon lose more than 250 workers after complications with several government contracts, including one to make medical masks for Washington state.
This week, the company announced it would cut 112 employees, including 55 in Seattle, in 60 days, unless it secures a resolution on a frozen multi-million dollar federal contract to manufacture gloves for time. cold for the US military. The other 57 jobs are at its plant near Los Angeles.
These potential layoffs would follow earlier cuts of around 150 jobs in a separate mask-making operation that Outdoor Research started at the start of the pandemic but closed this fall after its main customer, Washington state, did not choose to buy more masks, the company officials said.
It is “clearly a brutal week for the organization and strong emotions at all levels,” said Brett Kruse, vice president of people and culture at OR.
The latest round of cuts would leave OR with around 225 workers in Washington and 34 in Los Angeles, in addition to contractors in its offshore operations. OR is co-owned by former Nordstrom co-chair Dan Nordstrom and South Korea-based Youngone Corp.
The two rounds of layoffs are unrelated: OR’s mask operations were a pandemic backbone, while its defense work, which accounts for 25-30% of its total revenue, has been going on for decades.
But both highlight the challenges of being a supplier to government in times of turbulence.
The GOLD glove business got caught up in the Byzantine government procurement process. In August, OR announced a three-year, $ 49 million contract with the US military for a “cold weather glove system.”
But after a competitor protested the deal, the military split the price and gave the rival 40% of the job, said David Costello, who lobbies for OR. If that weren’t enough, amid the current federal budget battles, uncertainties remain about funding for the second and third years of the military contract, Costello said.
The GOLD mask misstep appears to be primarily the result of the pandemic economy.
The company was one of many outdoor clothing manufacturers, including Seattle-based Feathered Friends and Portland cobbler KEEN, who turned to making personal protective equipment, or PPE, in the early years of the pandemic, when foreign producers were struggling and shortages crippled the U.S. medical system. .
OR’s mask operation, located at its headquarters on First Avenue South, began production in June 2020 and eventually reached a daily peak of 70,000 surgical masks and 15,000 N95 foldable masks, Kruse said. .
Most of that went to the state, in a $ 9 million deal for 12 million surgical masks and just over a million N95 flatfold respirators, Linda Kent said. , spokesperson for the state business services department. The purchase was part of an “emergency PPE backstop” for hospitals and other organizations between March 2020 and October 2021.
But even before OR completed the contract with the state, foreign suppliers were already filling the US PPE market at a fraction of the price domestic producers, with their higher labor costs, could charge. , Kruse said.
“Washington State and various other hospital systems were in desperate need of [PPE] when they couldn’t get it elsewhere, ”Kruse said. “But when international supply chains reopened, we struggled to compete. ”
The outlook for the OR’s gloves and masks business remains unclear. The company “is using whatever connections it has” to break the contract with the military, Kruse said.
The company has allies. US Senator Patty Murray, Credit Committee Defense Subcommittee Member, Pushes “Army To Provide Outdoor Research With Additional Visibility On Future Orders That Could Help Save Most Or All Jobs At Risk “said a spokesperson for Murray. in an email Friday.
The outlook for the mask trade is more cloudy. Although Washington has planned a long-term PPE inventory and expects to solicit bids later this year, “the state’s mask inventory is sufficient to meet current demand,” Kent said.
Likewise, although the recently enacted federal infrastructure bill contains funding for domestic manufacturing of PPE, it’s unclear how long it will take to roll out that funding, Costello said.
This means more uncertainty for the OR and its workforce – and, arguably, for the rest of Washington, which could end up in another global pandemic, another global supply chain merger and a another national shortage of PPE.
“It’s not a matter of if, it’s just when,” said Garrett Nixon, director of Feather Friends, who partnered with OR on mask production for several months at the start of the pandemic. “So I think we don’t want to be completely dependent on foreign production anymore. “