Waves of the Pandemic: Why Manufacturers Need to Have a Back-Up Plan

May 2020

COVID-19 has been with us for only 144 days – a little less than 5 months. In that short time, we have had nearly everything familiar and desirable upended. Gathering is bad, going out to eat is bad, classrooms are disease transmission labs, weddings are bad, attending a religious service is unhealthy, attending a baseball game is bad, going to the grocery store is risky, choir practice is high risk. Traveling is not advisable as are dozens of other pre-COVID activities that used to comprise normal life.

In the midst of all of this sit manufacturers who are asked to carry on their essential activities and “just figure it out” as they seemingly always do. This article will consider the current highly uncertain COVID transmission pattern and suggest three infection patterns and their implications for manufacturers, in the absence of either a breakthrough drug or a safe and effective vaccine.

It is important to understand the context implied by the three scenarios on this chart from “The Future of the COVID-19 Pandemic: Lessons Learned from Pandemic Influenza,” April 30, 2020, Center for Infectious Disease Research and Policy, University of Minnesota. The intervention of social distancing has proven to be the only effective tool to slow, not stop, the spread of the virus.

The virus will continue to mutate and spread in ways not yet understood which has significant implications for any potential vaccine. The normal timeline for testing and producing a widely available vaccine that is effective and safe is around 10 years. The AIDS vaccine took six years to develop and so the notion that we can discover and produce a safe, effective, and widely available vaccine for the COVID-19 virus in 12-18 months is speculative. Herd immunity will have mostly the same effect as an effective vaccine. However, that requires 60%-70% of a population to be infected by the virus which would then create a population that has the antibodies to prevent the virus from replicating in a way that causes the disease. Today we have at most 5% of the U.S. population infected with the COVID-19 virus. Sweden is making the herd immunity public health choice and is paying a very high price for that choice.

Scenario 1: Peaks and Valleys

Given the social distancing intervention, my view is the peaks and valleys scenario is the most likely. This pattern will also be driven by the lack of compliance with the softening of social distancing rules and guidelines. We as a society seemingly have reached the limits of the stay at home and travel only as necessary life. It must also be recognized that a highly depressed economy has severe public health implications as well and we are making the choice to open the economy at the expense of more cases and a higher COVID-19 mortality rate.

Implications for manufacturers under Peaks and Valleys Scenario:

  1. Assume heightened surface sanitation, wearing masks, separated workspaces, and physical distancing will be with us for the longer-term (18-24 months). 
  2. Make sure vendors and anyone who enters your facility observe the same rules that you have for your associates.
  3. Have a back-up HR plan as your organization deals with 50% or more of your employees contracting COVID-19 (in the absence of a vaccine) and the related talent gaps emerge. Have a written plan for who will be the substitute for every job.
  4. Monitor employee health every day. This will vary by business, but just knowing whether someone has an elevated temperature, headaches, or trouble breathing are important facts to be acted on. There is some evidence that a low reading by an oximeter is a leading COVID sign (indicates reduced lung capacity) and that should be considered in conjunction with advice from an industrial health specialist. If tests become widely available, monthly testing of all employees may be advisable.

If you have questions about how to implement any of the above plans and procedures, I have experienced 33+ manufacturing cycles in a leadership position and can provide guidance on further planning for employees and your facilities in order to continue safe production.

Scenario 2: Fall Peak

The 1918 Spanish Flu resulted in 50 million deaths globally over its course, with most of those deaths resulting in the second wave of infection in the fall of 1918. In 1918 we didn’t know what a virus looked like, but we knew it was transmitted person to person and so isolation and separation was the public health tool of choice, no different than we are doing today. A third wave occurred in the spring of 1919 after about a third of the entire global population had been infected. If the Fall Peak case pattern emerges, the implications for manufacturers may look like this.

Implications for manufacturers under Fall Peak Scenario:

  1. The government will likely move to close most non-essential businesses again, very similar to what was done in March. This is their only tool available.
  2. If there was any uncertainty about whether your business was essential or not under the lock-down Executive Orders, find out now. Law enforcement is taking a highly inconsistent approach to shutting down businesses that they view as non-essential. Even small main street retail establishments that served food and some other non-food items were shut down.
  3. One straightforward approach to determining whether your business would be considered non-essential is simply to contact law enforcement and ask.
  4. If there is another lock-down it will likely last for several weeks again until the case data shows a 10-14 day trend of declining cases and so a continuing conservative approach to cash management and investments must be maintained.

FMJ has been consulted on several enforcement actions and we are able to consult with you about whether your business is considered essential and/or how to continue to safely run your business during another lock-down. 

Scenario 3: Slow Burn

Dense populations are the most at risk to COVID as air is contaminated by infected persons and that air is breathed in buses, trains, nursing homes, subways, apartments, and close living quarters. Seasonal laborers for agriculture and meatpacking and their families are also at great risk. However, more rural states have few cases and much lower infection rates and that may result in a steady, but lower, caseload that is marked by hot spots around the country. Those areas would be managed more severely on a selective basis. 
Implications of the Slow Burn Scenario:

  1. Likely no return to lock-down, but enhanced sanitizing, social distancing, face mask-wearing, and work separation until a vaccine is available.
  2. More manageable talent challenges as the risk of widespread absenteeism is much lower.
  3. Slow return to “normal” in the spring of 2022.
  4. This will allow more time to consider lessons of the past 144 days and potential “new work” options and processes.

The great uncertainty of COVID-19 is the asymptomatic transmission of the virus. Roughly 25% of those infected are asymptomatic and that, along with air travel, are the reasons why the virus traveled so fast. 

My perspective is that we are in the early stages of dealing with COVID-19. Our pre-COVID lives will likely not return for at least two years, which is why it is important for manufacturers to have a back-up plan in place, and I am happy to discuss what this back-up plan should entail for your particular business and industry.

If you have questions about the above article, creating a back-up plan for your business, or specific issues such as talent challenges amid COVID-19 or compliance of your COVID-19 Preparedness Plan, our Manufacturing practice group is here to help. Please contact Jim Seifert (Head of the Practice Group) at james.seifert@fmjlaw.comBob Fafinski (Shareholder) at robert.fafinski@fmjlaw.com, or Heidi Carpenter (Shareholder) at heidi.carpenter@fmjlaw.com.