Sen. King hears concerns about health care, energy and foreign competition

By Mike Lange
Staff Writer

    GUILFORD — Hardwood Products in Guilford is doing exceptionally well nowadays, considering that many Maine wood products firms were decimated by foreign competition years ago.
    Puritan Medical Products, which makes single-use applicators for the medical, diagnostic, forensic, food safety and drug manufacturing industries, has also found a worldwide niche in the industry.

Observer photo/Mike Lange

    CULTURE TEST — Sen. Angus King looks over a culture in the Puritan Medical Products microbiology lab during his tour of the Guilford firm last week. Pictured, from left, are King; Mehdi Karamchi, vice president of scientific affairs; and Brad Libby, microbiology products supervisor.

    Nevertheless, the two firms with around 450 employees aren’t immune from high costs associated with the Affordable Healthcare Act (ACA), energy and foreign competition.
    Sen. Angus King held an informal meeting with four company executives last week to hear their concerns.
    “We’ve invested $10 million in this company in recent years,” said Terry Young, general manager and CEO. “Business has been excellent on the medical and wood products side. China’s quality has been going down while their prices have gone up.”
    One reason that Hardwood Products has been successful is because they have their own engineers and designers on staff. “Product development has been a mainstay for years,” Young said.
    But Young, Chief Financial Officer Scott Wellman and Dave Perkins, vice president of sales, told the senator that the ACA could have an adverse effect on the company. “We’re self-insured and it’s worked well for our company and employees,” Wellman said. “So we want to be ‘grandfathered’ and keep what’s working best for us.”
    Wellman said that in addition to having a good relationship with local health care providers and wellness programs for workers such as diabetes management, the ACA “dictates how much we can charge for coverage and what benefits are covered. We’d also lose our ability to negotiate rates for procedures,” Wellman said.
    Young cited an example of a routine colonoscopy. “We’ve seen it as high as $7,000 and as low as $842,” he said.
    King said that while he supports most provisions of the ACA, he shared the officials’ concerns. “I’ve been a pain in the neck to the administration at times because I’ve also questioned how the act affects employers,” he said. “So I’m here to listen. What are the barriers to keeping your coverage and how can we fix it?”
    Young said that ACA should be flexible enough to allow companies to keep plans that are working. “We shouldn’t be locked in to a program that doesn’t allow us to be flexible,” said the CEO. King said he agreed. “I’ll get the answers you need,” he said.
    Hardwood Products is also a model for energy efficiency. It uses 16,000 cords of birch wood a year to make consumer products like ice cream and corn dog sticks and medical tools like tongue depressors.  And nothing is wasted.
    The excess wood is either burned or sold to pellet plants in the area, said Young. “We heat and want to generate our own electricity,” he explained, “and we’d like to distribute it to other places.”
    Hardwood Products has envisioned a way to export its excess power to True Textiles, another major Guilford employer, plus the town office and school buildings. But they can’t do it legally, Young explained, because Central Maine Power has the right-of-way to the routes needed. “There’s a provision that keeps us from crossing the bridge (over the Piscataquis River),” he told King. “It’s frustrating because we could save another company and the taxpayers a lot of money.”
    King said that he would look into the problem and see if a solution was feasible. “Your cogeneration program is an industry model,” he said.
    And while much of Hardwood’s woodenware isn’t affected by imports, some of Puritan’s products are, Perkins said. Puritan is one of the world’s largest manufacturers of cotton swabs, but they’ve been unable to get the most important customer: the U.S. government.
    Perkins said that one major distributor supplies V.A. facilities with swabs and tongue depressors from China. “I know American-made products should be given higher priority, but there seems to be many loopholes in the law,” Perkins said.
    King, a member of the Armed Services Committee, said that Perkins was correct. “We also have a ‘Made in the USA’ policy on clothing and footwear, but it’s widely ignored and it shouldn’t be,” said King.
    But he seemed clearly upset about the medical products. “We didn’t send our troops to Afghanistan on behalf of the Chinese government,” he said.
    King concluded his visit with a tour of the microbiology lab where many of Puritan’s single-use products are tested and refined.