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Home » Supply Chain » Mexico closes U.S.-owned factory for refusing to sell ventilators to Mexican hospitals

Mexico closes U.S.-owned factory for refusing to sell ventilators to Mexican hospitals

PortandTerminal.com, April 11, 2020

“We said to them, if you want us to consider you essential, you have to provide some benefit to the people of Baja California, by selling us ventilators, because we need them,”

TIJUANA, MEXICO  – The northern Mexico border state of Baja California closed a factory on Friday run by the American health care company Smiths Medical for refusing to sell ventilators to Mexican hospitals.

This is the most recent example of national interests competing with supply chain contractual agreements in the desperate scramble for medical supplies to combat the pandemic.

Last week in a similar incident, President Trump ordered Minnesota based 3M to stop selling the N95 medical masks it produces to Canada. Canada though is the sole supplier of a key strategic ingredient used in medical masks, surgical gowns and so on. There was some concern that Canada would retaliate by simply refusing to sell to America the supply of the raw material it needs to make masks and other PPE. This time, they didn’t.

READ: “This changes everything” Canadians horrified by Trump blocking N95 masks

In this latest incident in Mexico, Baja California Gov. Jaime Bonilla said that Smiths Medical refused to sell Mexico some of the ventilators that they manufacture in Mexico. He argued that the ventilators were also badly needed to treat patients with coronavirus in Mexico as well.

Bonilla said the Smiths Medical had continued to operate its assembly plant in Mexico under the argument it provided an “essential” service. Most non-essential plants in the country have been ordered closed to combat the COVID-19 pandemic.

READ: India allows limited exports of “game-changer” drug after Trump warns of retaliation

“We said to them “if you want us to consider you essential, you have to provide some benefit to the people of Baja California, by selling us ventilators, because we need them,”‘ Bonilla said.

Smith Medical reportedly replied to this demand by saying “we are not going to sell them but we are going to give them work which is what they need,” according to the governor.

It wasn’t the answer Bonilla wanted so he ordered the immediate closure of the Smiths Medical factory so that its workers could go home and take shelter to prevent the spread of COVID-19 coronavirus.

Smiths Medical did not immediately respond to requests for comment. Industry sources have argued the factory is an export-only plant that operates under special rules that allow it to import raw materials and parts duty-free, on the condition they be re-exported and not sold on the local market.

Headquartered in Minneapolis, Minnesota, the company is owned by U.K.-based Smiths Group plc.

Mexico now has 3,844 cases of COVID-19, with 233 deaths nationwide.

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