General Motors has been awarded a US government contract worth nearly $490 million to build ventilators amid the coronavirus crisis, the automaker confirmed Wednesday morning.
“GM and Ventec Life Systems are working with speed and urgency to arm frontline medical professionals with the critical care ventilators they need to treat critically ill patients,” GM spokesman Jim Cain said in a statement.
“GM is proud to deploy its purchasing and manufacturing capabilities alongside Ventec’s respiratory care expertise. We remain dedicated to working with the Administration to ensure that American innovation and manufacturing meet the needs of the country during this global pandemic,” he said.
The automaker is working with Ventec to build 6,132 ventilators by June 1 and 30,000 by the end of August, a statement from the Department of Health and Human Services said.
This is the first contract for the production of ventilators classified under the Defense Production Act, the government statement said. The contract is worth $489.4 million.
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The automaker will produce the fans at its plant in Kokomo, Indiana.
On March 27, President Donald Trump ordered GM to make ventilators, invoking the Defense Production Act.
“Our negotiations with GM regarding their ability to supply ventilators have been productive, but our fight against the virus is too urgent to allow the give and take of the contract process to continue on its normal course . GM was wasting time.” the White House said at the time.
Under the federal mandate, HHS is authorized to compel GM to “accept, execute, and prioritize federal contracts for ventilators.”
GM was stunned by the president’s portrayal of a slow response as the company worked to get the plants up and running. Then, on March 29, Trump reversed course, extolling GM after announcing plans two days earlier to make ventilators with Ventec at GM’s Kokomo plant.
“Originally, GM planned to manufacture the ventilators for Ventec Life Systems and our focus was to quickly establish the supply chain and quickly prepare the Kokomo site for production,” Cain told the Free Press.
“After the Defense Production Act was invoked, we began discussions with the government and the US Department of Health and Human Services and GM worked with unprecedented speed and urgency on the contract,” he said. .
The national reserve
“The evaluation of this contract under the DPA follows President Trump’s direction to HHS Secretary Alex Azar to invoke the Defense Production Act regarding GM’s ventilator production on March 27,” the statement said. of the government.
Azar said in a statement, “Invoking the Defense Production Act to ensure the production of ventilators by GM and other companies is part of President Trump’s approach across America to fight the coronavirus. Contracts of qualification under the DPA, HHS is helping manufacturers like GM get the supplies they need to produce ventilators as quickly as possible, while also ensuring that these ventilators are routed through the Strategic National Stockpile where they are needed most…” I am grateful to the GM team for working with the federal government to expand our nation’s ventilator supply as the pandemic evolves.”
GM’s timeline on this project, according to Cain:
- On March 17, GM CEO Mary Barra spoke by phone with representatives from StopTheSpread.Org, who suggested GM work with Ventec.
- On March 18, GM and Ventec executives held the first conference call to explore how GM might be able to help Ventec increase ventilator production.
- On March 19, a team from GM flew to Seattle to meet with Ventec.
- On March 20, GM engaged its global supply base and within 72 hours, they developed plans to supply all the necessary parts.
- On March 25, UAW crews began preparing the Kokomo site for production.
Production is scheduled to begin next week.
Contact Phoebe Wall Howard: 313-222-6512 o [email protected]. Follow her on Twitter @phoebes said. Sign up to our auto newsletter.