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Eyeing Orders to Quarantine, Businesses Ask: Who’s ‘Essential’?

March 23, 2020
Corporate leaders and trade groups appeal for quarantine-proof status.

On March 16, six counties surrounding San Francisco Bay issued a “shelter in place” order that directed almost all workers to remain home to prevent the spread of contagion. An exception in the rule, though, held that workers of “essential” industries—ones that had to do with critical infrastructure—could continue going to work as normal.

Now, more areas in the U.S. are employing similar bans on nonessential businesses, including New York, Colorado, New Jersey, and Illinois. The question now for manufacturers and business owners is: Does my business count as “essential?”

Tesla Motors took a particularly bold tack. When the March 16 Bay Area order came through, Tesla just kept trucking. Instead of shutting down its Fremont, California factory, the electric-car manufacturer simply continued with business as usual. An internal email from Tesla’s head of North American HR supplied the rationale that the Department of Homeland security considered the manufacturing sector critical.

Local law enforcement had other ideas. Following encounters with the Alameda county sheriff via Twitter and, later, in person, Tesla’s only U.S. car plant announced March 19 it would comply with the order as a nonessential business and close its factory doors.

Several trade groups representing equipment manufacturers, suppliers, and dealers took a more traditional approach. The Association of Equipment Manufacturers, Associated Equipment Distributors, and the Equipment Dealer’s Association sent 50 letters late March 19, one for each state governor in the United States, requesting that their member companies be deemed “essential” businesses.

Notably, the letters do not explicit request that equipment manufacturers or distributors be held exempt from quarantine orders. When asked if the letters were intentionally a response to “shelter in place” policies, Kip Eideberg, AEM’s Senior VP of Government and Industry Relations, hedged.

“I think the answer is yes and no,” he said in a phone interview. “Our responsibility ... obviously, is to look after our industry first and foremost, but also to make sure that we are responsive to the guidance and direction that we’ve been getting” from federal, state, and local governments, he said.

“Our industry is an essential part of a bigger piece, meaning that farmers who are right in the middle of planting season, for example, are not going to be able to plant and then ultimately harvest and put food on our tables unless they have access to maintenance and service set equipment,” he pointed out.

The letters, each signed by Dennis Slater, Brian McGuire and Kim Rominger, the CEOs of AEM, AED and EDA, respectively, say it is “vital that equipment manufacturers, suppliers, dealers, and service technicians are considered essential to the economic continuity” of each state. In an emailed statement, McGuire, of AED, said suppliers who perform “maintenance on the machinery are essential to ensure vital infrastructure projects are able to continue uninterrupted. Rominger, of EDA, echoed Eideberg’s example of farming as an example of an industry dependent on equipment. “No crops means no food, no meats, no fruits, no vegetables … nothing to eat,” he wrote.

Each letter includes information on equipment manufacturing and supplying in the state for the governor it’s addressed to. For example, the letter addressed to Governor DeWine of Ohio, where IndustryWeek is headquartered, says the combined associations “represent 51 equipment manufacturers and 445 dealer locations in Ohio that support more than 164,000 jobs and contribute $16 billion annually to the state’s economy.”

“What we wanted to do is to communicate to each and every governor the footprint that our industry has in their respective states,” said Eideberg.

In addition to communicating their economic footprint and advocating for their industry, Eideberg says, the trio of trade groups is also trying to make sense of the situation. “Right now it’s up to each individual state, the governor’s responsibility to designate what is and is not ‘essential.’ So we’re looking for some clarity here,” he said.

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