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Donald Rumsfeld, COVID -19, the Glass Supply Chain, and the Unknown Knowns

On February 12, 2002, during a news briefing, then Secretary of Defense Donald Rumsfeld responded to questions on Iraq supplying terrorist with weapons of mass destruction by saying:

“Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.”

Two years later, in a memo subject-titled “What you know,” Rumsfeld would go on to add a final category—"the unknown knowns”, or things that you think you know, that it turns out you did not. Interestingly, Rumsfeld would then flip his definition of “unknown knowns” during the filming of a 2013 documentary on him by Errol Morris to mean things that you possibly may know, that you don’t know you know.

COVID-19 and the impacts it is wreaking on the global supply chain and for our purposes here, that of the glass industry, elucidates in a very pragmatic and personal sense, the lessons of the “known knowns,” the “known unknowns,”” the unknown unknowns,” and the “unknown knowns.” Global pandemics, much like devastating wild fires, have a tendency to change the landscape and often, after the pain and the embers of the fire subside, allow for new growth.

U.S. tariffs and known unknowns

Leading up to the outbreak of COVID-19 the supply chain for hardware, aluminum, glass, machinery and equipment had already taken a hit from the U.S. tariffs on Chinese goods. The landscape had shifted to that of the known unknowns. Depending on where a manufacturer or supplier stood on the matter, stock inventory levels would adjust. U.S. fabricators would benefit to increase their inventory, while Chinese importers of goods would look to shift to a wait-and-see approach adjusting inventory levels on hand to fit something closer to a Just-in-time (JIT) approach hoping to wait out the new tariffs on China.

The known knownsthat the Trump administration was leveraging tariffs to force a policy change with Chinaresulted in the unknown known question of time. How long would this last? And what would manufacturers, suppliers and distributors, whose supply chain reached deep into China, do?

In our company, where we import and sell machinery and parts from China, we found some financial benefit leveraging the used machinery market by buying back our used equipment and rebuilding them. This approach opened up the opportunity to move our stock inventory of parts onto “new” machines that were totally rebuilt in the U.S. by our personnel. This mitigated the impact of the 25 percent tariffs on large equipment purchases. Nevertheless, as time passed, and the unknown known became the known known, the additional tariffs on components and inventory had to be passed on to the end consumer.

COVID-19 and unknown unknowns

Enter COVID-19 and the unknown unknowns. Markets don’t like uncertainty. There is no clearer evidence for that than the current historic yield-drop on the 10-year treasury bond and the stock market selloffs.  The travel industry is experiencing record levels of cancelations; companies are having their employees work from home; and the psyche of the American business owner along with that of the consumer shifts to a wait and see perspective.

As China looks to crest over what seems to have been the worst of the outbreak, the world studies it to learn more about the prolonged nature of COVID-19, while waiting for China’s engine of production to slowly begin to churn again. All the while, the virus has reached our shores and it is now our turn here in the U.S. and the Western world to grapple with the health, social, and psychological specters of the known unknowns, and its impact to our daily lives, our markets, and the interconnectedness that makes America, Europe, and China lynchpins to the global economy.  

Unknown knowns

Enter the unknown knowns things that you possibly may know that you don’t know you know. As Americans we have never shied away from adversity. This time is no different. However, it is not the rah-rah spirit that I wish to address here, but rather the introspective discovery that is birthed through that spirit. The unknown knowns are crossroads of perspectives for new growth. A growth that flourishes as we rebuild from a tornado, a hurricane, a death, or another form of loss. It is the growth after the embers of the fire fizzle out and new life takes flight. It is the emotional learning through which the unknown fear gives way to the known strength that comes out from within us.  

COVID-19 will one day pass. Unfortunately, we find ourselves in the early stages of the unknown, where anxiety, fear, and gut-impulses are at their peak. Stock markets will settle in the future and the fundamentals that drove the economy yesterday will drive the economy tomorrow. Through this challenge, several of us will experiment with new ways of doing business and perhaps uncover long term opportunities in the process. As we push into the unknown of today, we are bound to discover a resilience and strength that we may not have known we had; only to realize that it was there all along.


Rick Dominguez

Rick Dominguez

Rick Dominguez is President of Jordon Glass Machinery Inc. located in Miami, Florida. Jordon Glass is a family owned and operated business and provides glass working machinery, equipment, service, parts, and consulting to the glass industry – Opinions expressed are the author's own and do not necessarily reflect the position of the National Glass Association or Glass Magazine.