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Louis Vuitton masks and Formula One ventilators: 2020’s unlikely hero?


Tingnan Li

By

April 20th, 2020


As an increasing number of companies join the efforts in pivoting production towards medical masks, ventilators, and hand sanitiser, Tingnan Li rolls up her sleeves and dons an (imaginary) Prada mask to investigate.


Admit it, we have all been doing it. Scrolling through headlines on mobile news applications and websites to try and unearth any COVID-19 related news that is not disheartening.

Perhaps you have already seen these headlines in question?

Louis Vuitton and Prada are making medical masks.

Mercedes Benz is repurposing factories to produce ventilators.

Maybe you have wondered about the ‘how’ and the ‘why’ of it (alongside how to get your hands on a snazzy Louis Vuitton mask).

Let’s take a closer look at the curious situation at hand.

What is this all about?

Companies across the globe are scrambling to meet rising demand (both from the health sector and broader market) for goods like face masks, hand sanitiser, and ventilators.

Prada pledged to produce 110,000 masks by the 6th of April; Gucci pledged over one million. They are joined by international brands like Zara, Yves Saint Laurent, H&M, and the LVMH group (which owns Dior, Fendi, Louis Vuitton and Givenchy).[1]

LVMH also earlier announced that it was converting three of their perfume-manufacturing factories into hand sanitiser producing ones.

Why is this necessary?

The World Health Organisation (WHO) had urged every country to increase domestic production of personal protective equipment (PPE) by at least 40 per cent.[2] WHO Director-General Dr Tedros Adhanom Ghebreyesus has warned that insecure supply chains would put health workers in danger and hinder the combat of COVID-19.[3]

Closer to home, Industry Minister Karen Andrews has said that the Federal Government was working alongside industry to increase domestic production of critical goods such as surgical face masks. Similarly, the Department of Industry, Science, Energy and Resources has issued a request for information in order to map domestic PPE production capability.

However, the issue is not quite as simple as instructing domestic industries to increase production volumes to meet skyrocketing demand.

Australian supply networks are such that there is a heavy reliance on imported goods – not just the finished medical goods themselves, but also inputs to production.

To illustrate the dilemma, an industry survey has found that about three quarters of Australian hand sanitiser manufacturers have reported ethanol, bottle pump and spray shortages, not to mention difficulties in sourcing bottles, pouches, and gelling agents.[4]

With governments across the globe responding to COVID-19 by shutting borders and ordering mass-lockdowns, almost every country is scrambling to source these critical goods. This puts extra pressure on an already straining system.

The why and where

In terms of the finished goods, as stated earlier, some of them are indeed donated. Luxury conglomerate Kering announced that it would be purchasing 3 million surgical masks from China and donating them to the French health service.[5] Mango announced a similar initiative geared towards Spanish hospitals.[6]

However, there is also another flipside to this equation.

This flipside involves a commercial incentive to answer this question of why companies are going to all this trouble. Many government agencies are advertising tenders and offering contracts for these critical medical supplies.

These contracts not only mean companies facing a retail standstill can stimulate some cash flow, but at least in the United States, the government covers the costs for companies that secure these contracts. This all allows companies to pay rent, their employees, and keep the lights on and supply chains functioning.

Chinese factories as early as February were already pivoting from producing sneakers and smartphones to making masks. According to Stanley Chao, managing director at All In Consulting, a mandate coming from the Communist Party effectively declared that, “the government is saying, ‘Whatever you make, we will buy.’ So you don’t worry about the supply and demand issues.”[7]

The British government has also ordered 10,000 ventilators from a consortium of companies including seven Formula One teams and automotive companies (such as McLaren, Mercedes, Ford, and Rolls-Royce).[8]

Domestically, Adelaide company Detmold which normally makes food packaging has agreed to produce 100 million masks for the Federal Government’s National Medical Stockpile and 45 million for the South Australian Health Department.[9]

With lockdowns and various stay-at-home measures across the globe, economies are faced with benched workforces that are unable to meet their productive capacity.

Similarly, for countries facing restrictions on who can go to work, manufacturing of medical supplies such as face masks are much more likely to be deemed ‘essential’ and permitted to continue operations.

Though a small-scale, short-term solution of sorts, there are also constraints. As discussed, the nature of global supply chains (that often criss-cross over the globe) means there are issues of sourcing inputs. Furthermore, for those supplying government and health sectors, there is the issue of ensuring products meet the requisite medical standards.

However, many smaller companies are bypassing these challenges and producing masks for the general public where demand also exceeds supply. These cases are only expected to multiply as the United States’ CDC announced earlier in the month that all Americans should wear cloth masks when leaving the house.

…but is this all just a marketing ploy?

Another factor that cannot go without mentioning is the simple commodity of good PR. When COVID-19 loosens its grip on the global economy and populations venture back outside and return to work, companies will finally open their stores again.

They will again have to fight for retail sales, not to mention with many economists predicting a global economic recession (slated by Morgan Stanley CEO, James Gorman, to last through 2021)[10], retail will likely be one of the first sectors to feel the lingering impacts of COVID-19.

Hence, companies may also have business interests at heart when scrambling to donate medical supplies and be witnessed assisting in global (or local) efforts.

In difficult times like these, the free publicity is priceless, after all, business continuity has never been more important.

Reference list


[1] Bramley, V B. (2020, March 25). Prada the latest fashion brand to make medical face masks. The Guardian. Retrieved from https://www.theguardian.com/fashion/2020/mar/24/prada-the-latest-fashion-brand-to-make-medical-face-masks

[2] World Health Organisation. (2020, March 3). Shortage of personal protective equipment endangering health workers worldwide. Retrieved from https://www.who.int/news-room/detail/03-03-2020-shortage-of-personal-protective-equipment-endangering-health-workers-worldwide

[3] World Health Organisation. (2020, March 3). Shortage of personal protective equipment endangering health workers worldwide. Retrieved from https://www.who.int/news-room/detail/03-03-2020-shortage-of-personal-protective-equipment-endangering-health-workers-worldwide

[4] Accord. (2020, April 14). Hand Sanitiser Survey Industry Statement. Retrieved from file:///C:/Users/61403/Downloads/2020_04_Accord-Hand-Sanitiser-Survey-Industry-Statement-14-April-2020.pdf

[5] Bramley, V B. (2020, March 25). Prada the latest fashion brand to make medical face masks. The Guardian. Retrieved from https://www.theguardian.com/fashion/2020/mar/24/prada-the-latest-fashion-brand-to-make-medical-face-masks

[6] Bramley, V B. (2020, March 25). Prada the latest fashion brand to make medical face masks. The Guardian. Retrieved from https://www.theguardian.com/fashion/2020/mar/24/prada-the-latest-fashion-brand-to-make-medical-face-masks

[7] George-Parkin, H. (2020, April 6). Factories that used to make perfume, T-shirts, and cars are now making supplies to fight the coronavirus. Vox. Retrieved fromhttps://www.vox.com/the-goods/2020/4/6/21207135/factories-face-masks-ventilators-hand-sanitizer-coronavirus-manufacturing

[8] Reuters. (2020, March 30). Britain orders 10,000 ventilators from F1/ McLaren/ Mercedes/ Ford/ Rolls-Royce/ Airbus. Reuters autoblog. Retrieved from https://www.autoblog.com/2020/03/30/britain-coronavirus-ventilators-f1-ford-airbus-rolls-royce-mclaren-mercedes/

[9] Simmons, D. (2020, March 31). Adelaide’s Detmold Group to produce millions of respirator and surgical masks. Business News Australia. Retrieved from https://www.businessnewsaus.com.au/articles/adelaide-s-detmold-group-to-produce-millions-of-respirator-and-surgical-masks.html

[10] Reinicke, C. (2020, April 17). Morgan Stanley’s CEO says a global recession due to the coronavirus could last through 2021. Business Insider Australia. Retrieved from https://www.businessinsider.com.au/coronavirus-global-recession-morgan-stanley-ceo-last-through-2021-length-2020-4?r=US&IR=T

Photo source: https://pixabay.com/photos/statue-covid19-coronavirus-mask-5040235/

The views expressed within this article are those of the author and do not represent the views of the ESSA Committee or the Society's sponsors. Use of any content from this article should clearly attribute the work to the author and not to ESSA or its sponsors.

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