Connecticut Employers Adjust, Improvise as Pandemic Spreads
The 80 employees at Guilford-based Bio-Med Devices Inc. are working overtime, seven days a week, trying to keep pace with the demand for ventilators and oxygen blenders.
“We’re running full steam ahead right now,” company president and CEO Dean Bennett told NBC Connecticut this week.
“It’s a very sophisticated device and obviously maintaining inventory levels is very expensive for a small company.
“The supply chain is tough right now. The parts come from all over the world and a lot of ventilator manufacturers use some of the same suppliers, so there’s a shortage.”
Wepco Plastics, a family-owned Middlefield manufacturer of plastic injection molded parts for the aerospace industry, is quickly retooling to produce face shields for healthcare workers.
Company president David Parmelee said Wepco developed a prototype with Yale University and expects to begin production by April 13.
‘Connecticut Is Our Home’
“The people that will be using the PPEs we make are our neighbors or our friends,” he said.
“Connecticut is our home. We live here and work here—so do much of our family and friends. We love it here and would do anything we can to protect what we love.”
New Britain medical device manufacturer OKAY Industries also pivoted, developing a plan for making face shields that will be donated to hospitals in the Hartford HealthCare system.
“I take a look at the situation that we are at right now, it’s kind of like being at war,” president and CEO Jason Howey told the Hartford Courant.
“We just can’t see the enemy. You think about how you can mobilize.”
Bloomfield aerospace parts manufacturer Turbine Controls MRO offered its 10,000 sq ft factory floor, including assembly line, to ventilator manufacturers.
In Cheshire, medical equipment maker Marion Manufacturing is running 10-hour shifts, with no in-person meetings, social distancing practices implemented, and a ban on plant visitors.
“All our medical customers are urging us to stay open,” said company president Doug Johnson. “We’re trying to get a little bit ahead.”
Connecticut biotech companies, included on the Lamont administration’s list of designated essential businesses, are moving forward on clinical trials and R&D for drugs to treat cancer and other illnesses, including COVID-19.
And companies across the state responded to urgent calls by the Lamont administration this week for donations of personal protective equipment, including N95 respirators, masks, gowns, and gloves.
As the coronavirus pandemic continues, it’s business—but not business as usual—for Connecticut companies as they scramble to navigate the pandemic.
Eighty-two percent of employers expect sales and revenue declines for the first quarter of 2020 according a survey produced by CBIA, the state Department of Economic and Community Development, and AdvanceCT.
Less than half (42%) are open with regular hours of operation, 38% are operating at reduced capacity, 19% are closed, and 2% are open with expanded hours.
Forty-eight percent say their supply chains have been disrupted by the pandemic while 62% are postponing investment decisions.
The most pressing need that government can address right now? Fifty-five percent said immediate working capital and financial assistance.
And 61% of surveyed employers did not feel prepared for their workforce to work remotely.
From factories to accounting firms, employers are improvising and adjusting on the fly to situations that seemingly change on a daily basis.
They are employing a range of strategies and tactics, including remote work, running alternating 12-hour shifts, rotating management staff between office and home, sequestering personnel, and renting additional vehicles so field crews have one person per vehicle.
Horst Engineering in East Hartford has an internal task force dedicated solely to responding to the coronavirus.
Only production workers and their supervisors remain at Pegasus Manufacturing in Middletown as every office employee, including sales and finance, works remotely.
Webster Bank’s 175-plus branches throughout the region are open to customers at drive-up windows and ATMs, but lobbies are closed, available by appointment only.
“Every day brings a new challenge that I didn’t have yesterday,” said Drew Andrews, CEO and managing partner of Whittlesey, a midsize CPA and IT consulting firm with offices in Hartford, Hamden, and Holyoke, Mass.
With federal and state tax deadlines extended to July 15, Andrews said the firm is learning how to adapt during the busiest time of the year.
“We have a younger, more tech savvy team. We have in-house technology knowledge,” he said.
Andrews is doing his best to remain calm and focused while overseeing an operation with 170 employees and over 5,000 clients.
“I started as CEO right before things got really bad in 2008,” he said.
“I’ve lived through crisis management, and that’s what I think we’re in.”
Pegasus president Chris DiPentima was surprised earlier this year when parent company Leggett & Platt Aerospace, which has operations in China, suspended all international travel, then all national travel, weeks ahead of other companies.
“In retrospect, it was right,” he said on a CBIA BizCast podcast this week.
“I think we had some really good insight as far as what was happening in China and Europe and reaped rewards because of that insight.”
Leggett & Platt also has a plant in Kirkland, Wash., about five miles from the epicenter of the U.S. coronavirus outbreak.
Safety measures the company instituted early on in China and Kirkland became the template for every Leggett & Platt facility, DiPentima said. They include:
- Checking employees’ temperature on arrival and after lunch
- Having them wash their hands before starting work
- Eliminating common touch screens
- Encouraging social distancing
- Keeping windows and doors open for ventilation
- Sending home sick employees
- Installing more hand sanitizers and frequent facility cleanings
“That’s become the standard practice for all our domestic facilities,” DiPentima said.
Horst Engineering made similar changes and is holding virtual meetings when possible, limiting attendance at in-person meetings, allowing remote working, and adjusting work schedules.
Horst is also limiting visits, which must be approved by the task force, requiring visitors to complete a health-screening declaration before arriving, and making shipping and receiving practices safer.
“Our focus and priority remain the health and well being of our employees, their families, our customers, and our suppliers,” said president and CEO Scott Livingston.
Horst will weather this storm, Livingston pledged in a letter to customers and suppliers.
“Perseverance is one of our five core values, and over the last 74-plus years we have faced many obstacles and overcome many roadblocks,” he wrote.
‘Employees, Customers, Communities’
Elaine Ficcara, vice president of external communications for Webster, described a “multitude of steps we’ve taken to support our employees, our customers, and our communities so far during this unprecedented time.”
They include allowing employees to work from home where possible, ensuring employees will not be financially impacted for the next 30 days if unable to work due to childcare or other issues, and creating a special “Ask the CEO” email for employees.
Changes for its customers include increasing debit card spending limits and waiving penalties on early CD withdrawals up to $25,000.
The bank is also offering options for payment deferrals on mortgages, home equity, personal, and small business loans based on need, and expediting the SBA loan application process for qualified businesses impacted by the pandemic.
Small Business Impact
While larger companies are surviving by adjusting, the pandemic is hammering small businesses.
For the past three years, Silk City Coffee has been a popular gathering spot in Manchester.
But owners Glenn and Tammy Gerhard reluctantly closed the business this month, declining to offer takeout while saying shutting the door is best for their community.
“We love coffee but we love people a whole lot more,” Glenn Gerhard said.
“It helps us sleep at night knowing that we’re doing the right thing.”
While state and federal agencies are offering emergency relief loans, the Gerhards say that would be a last resort and have no desire to take on debt.
Like many Connecticut breweries, Alvarium Brewery in New Britain has implemented “to-go brews” so they can maintain a revenue stream.
Back East Brewery in Bloomfield is also selling beer to go.
“We’re doing what we can to survive,” Back East cofounder Tony Karlowicz said.
He said he’s never experienced anything like this.
“We’ve had our ups and downs over the years—loss of good staff members, supply shortages—but nothing even comes close to what we’re in,” he said.
“We’re just hoping and praying it gets better before it gets worse.”
Karlowicz has a simple message for lawmakers.
“Please do what is right for small businesses,” he said. “We are the engine that keeps people employed.”
“Small businesses and their employees are bearing the brunt of this severe economic downturn,” says CBIA president and CEO Joe Brennan.
“All signs indicate that we’re only at the beginning of what will be a very difficult and challenging time.”
Unemployment Trust Fund
While it’s likely most employers are not thinking about their annual unemployment insurance taxes, they may before this is over.
In the 2008-10 recession, Connecticut’s Unemployment Compensation Trust Fund was quickly depleted, forcing the state to borrow money from the federal government to pay workers who lost jobs.
But employers had to pay this back and saw their annual per-employee unemployment tax go from $42 to $189 between 2011 and 2015.
The trust fund should have a balance of around $1.7 billion to weather an economic downturn but only had around $706 million in December, 2019.
For years, CBIA urged lawmakers to make reforms to strengthen the fund in case of a downturn like this—Connecticut workers filed 99,000 unemployment claims between March 13 and 23.
“Although even states with healthy unemployment trust funds will likely have to borrow money from the federal government, the depth of Connecticut’s trust fund solvency problem could have been avoided had simple, commonsense reforms made by other states been adopted here,” said CBIA’s Eric Gjede.
Employers recognize the pandemic is hurting people and communities and are responding.
United Technologies Corporation donated 75,000 pairs of gloves, 19,000 masks, and 3,000 medical grade suits to support U.S. efforts to fight COVID-19.
CVS Health’s Hartford-based insurer Aetna is waiving patient co-payments for hospital stays tied to the coronavirus.
ConnectiCare is allowing no-cost member real time visits with medical and mental health professionals by phone, computer, and mobile app and providing for 90-day prescription refills and delivery.
United Illuminating, Connecticut Natural Gas, and Southern Connecticut Natural Gas, all part of Avangrid, announced the suspension of late and disconnection fees and the waiver of deposit requirements to help struggling customers, including businesses.
Eversource suspended all disconnections for nonpayment, is waiving late payment charges, and will offer small businesses a 12-month payment plans.
The Avangrid Foundation is committing $2 million to national and local organizations that support vulnerable communities dealing with the pandemic.
AT&T waived domestic wireless voice and data overage fees for all U.S. customers retroactive to March 13, said John Emra, the company’s Connecticut president.
In addition, he said, AT&T will not cut service of any wireless, home phone, or broadband small business or residential customer unable to pay their bill due to disruptions from the pandemic.
Webster is donating $250,000 to nonprofits, including $100,000 to Feeding America partners, $60,000 to local American Red Cross chapters, and $90,000 to local nonprofits.
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