Supply Chain

GM Announces Ventilator Deal as Trump Fumes

"This is really an unprecedented activity that GM and Ventec are in to mass-produce a ventilator with an auto manufacturer."
Matthew HellerMarch 30, 2020

President Donald Trump used the Defense Production Act to order General Motors to manufacture ventilators for coronavirus patients even though the automaker had already announced a partnership to do so.

Trump’s order on Friday followed a barrage of tweets in which he berated GM for “wasting time” and “seeking to rip off the government.” It was the first time he had invoked the Korean War-era DPA to combat the coronavirus, which has been spreading amid nationwide shortages of ventilators, facial masks and other medical equipment.

But GM had been working on an emergency joint venture with a small manufacturer, Ventec Life Systems, which it announced earlier Friday even in the absence of a contract from the Federal Emergency Management Agency.

Under the joint venture agreement, GM will build Ventec’s VOCSN critical care ventilators at GM’s Kokomo, Ind., factory, with shipments scheduled to begin as soon as next month. Ventec is also stepping up production at its Bothell, Wash., plant.

“This unique partnership combines Ventec’s respiratory care expertise with GM’s manufacturing might to produce sophisticated and high-quality critical care ventilators,” Ventec CEO Chris Kiple said in a news release.

The New York Times said it was unclear whether Trump’s use of the DPA “would make much difference. He was essentially ordering [GM] to do something it had already arranged to do.”

“Company executives seemed stunned by the president’s effort to command them to carry through with an effort they had initiated,” the Times added.

Ventec, one of about a dozen worldwide manufacturers of ventilators, had been ramping up production even before it teamed up with GM. The joint venture partners are hoping to reach a manufacturing capacity of more than 10,000 ventilators per month with the infrastructure and capability to scale further.

“This is really an unprecedented activity that GM and Ventec are in to mass produce a ventilator with an auto manufacturer,” Kiple told NBC News. “The commitment from GM has been overwhelming.”

FEMA reportedly balked at the estimated $1.5 billion cost of the contract that the companies had asked for.