The Trump administration has awarded Kodak a $765 million government loan under the Defense Production Act to help speed the domestic manufacturing of certain medical drugs.
A new division, Kodak Pharmaceuticals, is expected to create 350 jobs, senior administration officials said during a call with reporters Tuesday. The move is billed as part of a larger effort to secure a United States supply of critical pharmaceutical ingredients and modernize the Strategic National Stockpile.
The U.S. International Development Finance Corporation, the agency that engineered the deal, has been working with the Department of Defense to relocate important supply chains out of China for months at the president’s direction.
Billed as the first of many such deals, Trump officials are calling it a win for President Trump’s “America First” doctrine.
“It’s a big win for the Defense Production Act,” said Development Finance Corporation CEO Adam Boehler on the call. “It’s a big win for New York. It’s a big, big win for blue-collar jobs.”
Boehler, a member of the White House coronavirus task force, will travel to Kodak’s Rochester, New York, facility, accompanied by White House Office of Trade and Manufacturing Director Peter Navarro and the Chairman of the Joint Chiefs of Staff Rear Adm. John Polowczyk, who leads the Supply Chain Stabilization Task Force.
Touting the plan, Navarro said that it heralded “literally the industrial renaissance” of New York, notably in the Northwest, “which has been absolutely decimated by foreign competition.”
At peak production, the company will be able to produce 25% of the active ingredients needed for U.S. pharmaceuticals.
“It’s unacceptable going forward that American pharmaceuticals — the generic form of pharmaceuticals — are made in China and outside of the United States,” Boehler said on the call. “We will be self-reliant, and that will ensure our safety.”
Companies such as Bayer, Fuji, and 3M have successfully retooled their chemical and material science know-how into drug-making, and Kodak, Navarro said, was well-established to do likewise. The company has an expansive 12,000-acre facility in northern New York with 50 million square feet of manufacturing, lab, warehouse, and office space, their own on-site power plants, and a wastewater treatment facility that can process 30 million gallons per day.
“Back in February, [Trump] pulled me into the office and said, ‘Look, we are dangerously dependent on the rest of the world, particularly China, not just for our medical supplies like masks, gloves, medical equipment like ventilators, but also for essential medicines,'” Navarro said, with the president insisting, “‘We need to attack this problem from all different sides.'”
Navarro praised Development Finance Corporation for the deal, calling it a win for the U.S. “because it’s going to get production going” and for taxpayers because of the structure of the 25-year loan, which he said was collateralized with assets and performance contracts.
“What we are trying to do now with projects like Kodak is to become an arsenal of medicine,” said Navarro, referencing the wartime slogan ‘Arsenal of Democracy’ that President Franklin Roosevelt used to tout the prowess of U.S. industrial manufacturing during World War II.
For Kodak, “this may well be one of the greatest second acts in American industrial history,” Navarro said.
New York Gov. Andrew Cuomo “couldn’t have been more happy” when Navarro called him last Friday to relay the news, indicating that the state “would do everything it could to streamline any regulatory barriers” and provide additional assistance.
