American condom-makers layoff workers as production heads overseas
Puns aside, this is no laughing matter for Eufala, Alabama. The small town, whose citizens have been making condoms for almost 40 years, is reliant upon rubbers for a fair bit of the local economy. USAID, which has distributed an estimated 10 billion condoms overseas, was a major client, and its decision may cost Alatech, the local manufacturer, up to 300 jobs. As the consequences ripple through the area, Eufala can expect to lose many, many more jobs.
This decision wasn't made lightly, but Alatech, unfortunately, charges more than five cents per condom. While this price seems very low to anyone who has ever purchased a retail prophylactic, when multiplied across a massive order like USAID's, it becomes quite high. Overseas suppliers, notably Korea's Unidus corporation and China's Quingdao Double Butterfly Group, can supply condoms for as little as two cents apiece.
Of course, China and Korea don't have to deal with America's pesky labor laws, but that's another matter entirely...
Moreover, Alatech and the government have previously had disputes over delivery and product specifications, although Alatech claims that its delivery problems have long since been handled. The primary problem, apparently, lies in the fact that Alatech's condoms are very thick, which has caused some overseas beneficiaries to reject them. The Alabama company asserts that it can manufacture the condoms to almost any specification, and made USAID's sheaths thick because those were the requirements that the government demanded.
For that matter, it's worth noting that, as recent pet food and lead-toy scandals have demonstrated, China's manufacturing industry is far from perfect. In fact, by its own admission, its condoms are often too thick, too uncomfortable, and have poor quality control.
The government, meanwhile, has hired a Massachusetts company to act as a middleman, shielding it from a bid protest. In this, USAID has been helped by Congress' decision to drop the "buy American" provision in a recent spending bill. In doing so, it opened the door for USAID to seek overseas vendors.
If the government's stimulus program won't help condom manufacturers to retain their employees, then maybe it's time for consumers to pick up the slack. The next time you find yourself trying to choose between Durex or Trojan condoms, ask yourself if you'd rather put food on an American table or one in England. When it comes to rubbers, remember your patriotic duty and keep America's prophylactic makers in business!