Factories Close for Good as Pandemic Cuts Demand

Imagine you’re in your office, and you notice that there aren’t any takers for your lunch. Not in the office, not elsewhere. Not even in your bedroom, when you’re away from the office.

Now, when the red lights go on, what do you do?

When the United States suddenly starts dying of something you can’t identify — but realize will cost you a lot of money — what do you do?

If you’re a manufacturer, that’s what you do. And by “you,” I mean your entire workforce.

You close the doors. And in the process, you destroy whole families, communities, entire industries, and your country — literally. You destroy.

This is exactly what happened on June 1. That was the date the last factory closed in the U.S.

As you may have heard, the culprit is flu virus germs. And yes, the “swine flu” that killed so many in 1918 and 1919 wasn’t a thing. It was something called “swine flu,” which was a pox.

After it came out, the World Health Organization declared this new virus “enza,” and it threatened to kill off a third of the world’s population. It didn’t. But it made an indelible mark. It was a catalyst for changes that would shape the future. So many would later use the word “pandemic” to describe the pandemic that was now impacting America.

What followed was… things like the Ebola epidemic, the cholera epidemic, the typhoid epidemic. Whatever. To this day, pandemics are one of our greatest hurdles to fighting infectious diseases. These diseases have all caused the death of millions and millions of people. We’re still feeling the effects.

You would think that a thing so lethal would spread like wildfire. But as it turns out, it doesn’t. Pandemics don’t kill people. It’s how you prevent the spread of a pandemic that really counts. And that means businesses shut down.

Massive scale migrations create imbalances in supply and demand. This is why what the upending of the global supply chain means.

In the case of the global supply chain, the two most common types of supply chain imbalances are:

• Unplanned: when one supplier has a difficulty meeting demand, simply because they have insufficient inventory. This is commonly characterized as a “shutdown” or “guarantee freeze.”

• Imbalanced: when demand is outside of the inventory committed to a supplier, and that supplier also lacks the capital to meet the demand. This can be called an “inventory blow-out.”

Both of these situations result in supply and demand imbalances in the market, and there’s no hiding from them. A major outbreak can literally be the last straw for one company. That means they have no choice but to cut production and lay off people.

What happened yesterday? Well, the United States suffered the loss of the last factory in the United States — because of just one death, caused by flu virus germs, specifically, the flu pandemic that caused a million deaths in 1918.

And today, there is no factory to supply the country with an old-fashioned hard-hitting product like steel. And there is no industry that will only provide for the needs of the whole U.S. market, like car manufacturing used to do. How about, anything you’d need to get around? That too is a thing of the past.

Now, there are plenty of companies in the U.S. who, instead of paying the price for this, have adjusted their strategy to become global players. They’ve turned these historical challenges into major opportunities.

There’s innovation. In addition to the brilliant young entrepreneurs and people who invented the modern vehicles we drive, there are also novel companies innovating next-generation solutions for the burgeoning transportation challenges. For example, how about a self-driving electric semi?

Or a drone that navigates the urban environment safely and efficiently? Or a self-driving car that runs on solar energy?

There’s transformation, and then there’s transformation. And this isn’t your grandmother’s country anymore. This isn’t your grandfather’s America, either. Maybe we’ll become another China, but it’s more likely that our nation’s place in the global economic roadshow will be diminished, like it was in 1929.

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