3 million coronavirus masks arrive in California as part of quiet deal with Chinese company

SACRAMENTO —  The first shipment of protective masks purchased from a Chinese company by advisors to Gov. Gavin Newsom arrived in California over the weekend, part of a still-confidential agreement costing California taxpayers almost $1 billion.

Newsom briefly mentioned the delivery in his remarks Wednesday on the state’s coronavirus response, and it was later confirmed by the Governor’s Office of Emergency Services. In all, the state received some 3 million surgical masks made by BYD, a company known for building electric vehicles with an assembly plant in Los Angeles County.

The masks “arrived on Saturday night, got into the state warehouse on Sunday, started getting distributed to 18 specific sites yesterday,” Newsom said. “And as more protective gear comes in, more quickly, we’ll get it out.”

Newsom has said BYD agreed to make 200 million masks a month for California, a contract that runs through the end of June at a total cost of $990 million. Most of those will be N95 masks, highly sought by emergency responders and healthcare workers. The contract reportedly calls for 150 million N95 masks. Those that arrived Saturday on a flight from China to Los Angeles were traditional surgical masks, of which the state expects to receive 50 million.

The exact details of the lucrative contract have been kept under wraps since the governor revealed its existence during an interview with MSNBC host Rachel Maddow on April 7. The following day, The Times asked for the agreement and the details of the purchase, a request has not yet been fulfilled by the Governor’s Office of Emergency Services. Administration officials have declined to tell anyone, including members of the Legislature, exactly how much each mask is costing the state.

In two separate public hearings, Democratic and Republican lawmakers have criticized the secrecy surrounding the BYD contract. The same night that Newsom touted the deal on national television, administration officials asked the Legislature’s joint budget committee for permission to waive an existing 72-hour rule to spend $495 million for a first installment on the purchase. On Monday, officials told lawmakers a $104.7-million payment was due — bringing the total paid to BYD’s healthcare supply subsidiary to $599.7 million.

BYD launched its effort to enter the protective mask-making business in March. Though the products are being made in China, the partnership with the state involves the company’s California subsidiary — the operator of a vehicle assembly plant in Lancaster that was awarded a $3-million state tax credit in 2015.

“This is an organization that has a manufacturing capability that is specifically designed to meet this need. And this is a great partnership because it is a California-based company,” said Mark Ghilarducci, director of the Governor’s Office of Emergency Services, on April 8.

State officials have insisted that the undisclosed contract requires the N95 masks made by BYD to first be approved for effectiveness by the National Institute for Occupational Safety and Health. A BYD spokesman said Wednesday that the certification could come as soon as the end of the week and that the first shipment of surgical masks was slightly ahead of schedule.

Communities across California have an urgent need for masks and other protective gear. On Tuesday, Los Angeles Mayor Eric Garcetti announced the city will purchase 24 million N95 masks from North Carolina manufacturer Honeywell. The first 100,000 masks in that order are expected to arrive in May and will cost 79 cents each, Garcetti said.

The cost per mask of those made by BYD could be much higher. State officials have declined for more than three weeks to provide additional details, citing concerns that the masks could somehow be commandeered by an outside entity during the process of delivering them to California.

Newsom hinted at the first installment of BYD masks in three successive public events this week but never mentioned the company by name. On Wednesday, he said the masks will be a key component of California’s pandemic response.

“We recognize the totality of the need is in the tens of millions,” he said. “And that’s why we went forward with a rather substantial procurement.”