3M complies with mask production order but hits back on Trump administration claims

3M hit back Friday at White House assertions that it was not doing enough to get needed N95 respirator masks to U.S. health care professionals, escalating tensions with the Trump administration.

President Donald Trump a day earlier invoked the Defense Production Act to compel the company to sell its face masks to the Federal Emergency Management Agency above other customers. In doing so, he and others in the administration portrayed 3M as putting the U.S. behind other countries in the fight against coronavirus.

The Maplewood-based company, usually tight-lipped about its operations and interactions with top officials, responded with an early-morning statement. Its chief executive, Mike Roman, subsequently gave several interviews with national media.

"The narrative that we are not doing everything we can to maximize delivery of respirators in our home country — nothing could be further from the truth," Roman said on CNBC Friday morning.

Later in the day, Peter Navarro, a trade adviser to Trump in charge of policy related to the act, again criticized 3M.

"While hundreds of other large American multinationals are stepping up with pride and patriotism, 3M remains an outlier and its propaganda war must stop," said Navarro, adding that the company was "operating like a sovereign profit-maximizing nation internationally."

At the center of the conflict is Trump's desire for U.S.-based makers of products that protect against or fight COVID-19 to direct them to Americans first. But for companies like 3M, that nationalist impulse conflicts with their global reach and customer base. For decades, multinational firms have made goods in multiple places around the world and shipped them where needed based on market principles and trade laws.

Trump last month used the same act, first invoked in the Korean War when U.S. companies chiefly made and sold goods domestically, to pressure General Motors into production of ventilators. Trump also expressed displeasure with GM when he used the act in that case.

On Thursday, Trump tweeted: "We hit 3M hard today after seeing what they were doing with their Masks. 'P Act' all the way. Big surprise to many in government as to what they were doing — will have a big price to pay!"

3M is the world's leading maker of N95 face masks that filter out at least 95% of microparticulates. The company makes about 1 billion such masks annually in plants around the world. Since the COVID-19 outbreak began, 3M has said it will double production by the end of the year.

On Tuesday, Roman said 3M had directed 80% of its U.S. sales to health care professionals in the hardest-hit areas, with the other 20% going to federal agencies, with FEMA getting the most.

The new order prioritizes FEMA for 3M's face masks.

Minnesota Gov. Tim Walz said Friday that the order confuses the issue. Trump has said numerous times that FEMA is a backup for health supplies and states should be primary buyers.

"We're being told to go out and find these ourselves," he said. "When we find them, we're getting outbid by the federal government, and now they're shutting off a source right here in Minnesota, apparently."

In its statement Friday, 3M expressed concern that Trump's order will force it to cease exporting U.S.-made masks to Canada and Latin America. In some countries, 3M is the only supplier of N95 respirator masks.

The company warned there are "significant humanitarian implications of ceasing respirator supplies to health care workers in Canada and Latin America, where we are a critical supplier of respirators," the company said.

It also said that halting exports of N95 masks may lead other countries where it operates to retaliate by doing the same. "If that were to occur, the net number of respirators being made available to the United States would actually decrease," 3M said.

Navarro denied that the administration told 3M to cease any exports and said that the order was to provide "all of the N95 respirators it can possibly muster to prevent Americans from dying."

He further said: "All we get from the CEO on down to the head of their PR department is lie upon lie, the latest of which — which is dead wrong — is that we demanded 3M not send production from its U.S. plants to our friends and allies in Canada and Mexico."

Prime Minister Justin Trudeau called the move to restrict the movement of N95 masks a "mistake," asserting that trade of health supplies is moving both ways across the Canadian border.

The U.S. is not the only country restricting exports of medical supplies.

As of Wednesday, 68 nations had put limits on exports of medical supplies, according to tracking by Simon Evenett, a professor of international trade at the University of St. Gallen in Switzerland.

But compelling 3M to divert orders from its overseas factories to the U.S. could have repercussions, said Karthik Natarajan, a professor of supply chains and operations at the University of Minnesota's Carlson School of Management.

"The other country could retaliate," he said. "The other country might say, 'We won't sell you a product you might need.' "

The order could set a precedent as well, creating issues for more companies than 3M, he said.

Ernest Abbott, who was the general counsel of FEMA during the Clinton administration, also saw flaws in Trump's order.

"Obviously the United States can say what they want to happen, but it's not clear whether there is the legal power of the United States to force an operation in another country to violate the law of that country — even if it's an American company," he said.

3M said it had been working with the Trump administration to increase the number of the N95 masks coming to the U.S. from its overseas factories. Roman said China had approved an increase of exports from a 3M factory there and 10 million masks started being shipped this week.

"We've been telling the administration for days and days," Roman said.

In February, the company started working with the administration, laying out all of its manufacturing capacity and any issues in ramping up and shifting its operations. On March 5, Vice President Mike Pence visited 3M's headquarters and Roman said they had a "great discussion." Pence praised 3M at the time for "playing a vital role in the health of our nation."

At that point, 90% of the N95 respirators made in the U.S. were going to industrial customers. Now "almost everything" is going to health care customers, Roman said.

The administration helped pave the way for that shift more than a month ago with an emergency use authorization allowing those masks to be sold to hospitals and other health care providers.

Separately, 3M said it continued to act on reports of price gouging and unauthorized reselling of its respirator masks.

"Let me say this," Roman said on CNBC, "the idea that 3M is not doing all it can to fix price gouging and unauthorized reselling is absurd."

Star Tribune staff writer Mike Hughlett contributed to this report, which includes material from the Associated Press and the New York Times.