GM ordered to produce ventilators under Defense Production Act
President Donald Trump, accusing the company of “wasting time” while the federal government faces mounting pressure to marshal more resources to stem the deadly coronavirus outbreak, invoked emergency powers and ordered General Motors on Friday to produce ventilators under the Defense Production Act.
In a memorandum released by the White House, Trump said Health and Human Services Secretary Alex Azar would determine the number of ventilators GM must build.
The act grants the president power to expand industrial production of any key materials or products for national security and other reasons.
In the case of GM, the order means the company must “accept, perform, and prioritize federal contracts for ventilators.”
Also late Friday, Trump appointed White House trade adviser Peter Navarro to coordinate actions under the act, and issued an executive order authorizing the government to “guarantee loans by private institutions, make loans, make provision for purchases and commitments to purchase, and take additional actions to create, maintain, protect, expand, and restore domestic industrial base capabilities to produce such resources.”
Rising death toll
Trump, at a White House briefing late Friday, said the United States would produce 100,000 ventilators in 100 days and said he had named White House aide Peter Navarro as the coordinator of the Defense Production Act.
“We’re going to make a lot of ventilators,” Trump said, pledging to take care of U.S. needs while also helping other countries.
Trump said there was a great chance the United States would not need so many ventilators to fight the coronavirus outbreak, and would then help other countries in need.
On Friday, the number of confirmed coronavirus cases in the United States topped 100,000, the highest in the world according to Reuters. The U.S. death toll now tops 1,550.
GM said earlier Friday it will begin shipping FDA-cleared ventilators as soon as next month from an Indiana plant after Trump earlier Friday urged the company, as well as Ford, to ramp up output of the devices to treat COVID-19 patients.
GM, in partnership with medical device company Ventec Life Systems, is building critical care ventilators at a Kokomo, Ind., factory under a program dubbed Project V. Ventec also will increase production at a manufacturing site in Bothell, Wash.
It’s unclear whether Friday’s order will require GM to tap other U.S. plants to build ventilators, but the automaker now faces direct government pressure under law to accelerate output.
“Our negotiations with GM regarding its ability to supply ventilators have been productive, but our fight against the virus is too urgent to allow the give-and-take of the contracting process to continue to run its normal course,” Trump said.
“GM was wasting time,” Trump added. “Today’s action will help ensure the quick production of ventilators that will save American lives.
GM, in a statement late Friday, said it has been working with Ventec and other partners “around the clock for over a week to meet this urgent need.”
The automaker, which is undertaking the project as a contract manufacturer for Ventec, is donating resources at cost, according to a Friday statement.
Rep. Andy Levin, D-Mich., said in a statement Friday that he had repeatedly called on the president to use the Defense Production Act to address the coronavirus pandemic, but said the order “must be used as a tool to work with the private sector — not as a cudgel against individual companies.”
“President Trump must use the act to coordinate a holistic response to the epidemic and active the full potential of American businesses to resolve the shortages that hamper our health systems’ response to COVID-19,” Levin said. “Selective use of the act is still progress, but it matters little unless the president can use it to build unity and solve problems. Right now, he seems more keen on using it to cause embarrassment for industry leaders against whom he holds grudges.”
Ventec and GM said they are able to build more than 10,000 ventilators a month, depending on the needs of the U.S. government.
Since the GM-Ventec partnership was announced March 20, the companies’ supply base has sourced more than 700 individual parts that are needed to build up to 200,000 ventilators.
“We are proud to stand with other American companies and our skilled employees to meet the needs of this global pandemic,” GM CEO Mary Barra said earlier Friday. “This partnership has rallied the GM enterprise and our global supply base to support Ventec, and the teams are working together with incredible passion and commitment.”
Working with the UAW, GM said it will recall about 1,000 workers to immediately scale up ventilator output.
GM also will begin producing surgical masks at a manufacturing facility in Warren, Mich., starting next week. Within two weeks, GM expects to ramp up production to 50,000 masks per day. That total could potentially increase to 100,000 per day.
The UAW, which has pressed the Detroit 3 to idle U.S. plants to safeguard employee health and safety, applauded GM’s efforts.
“General Motors should be commended for stepping up at a crucial moment in our history,” Terry Dittes, head of the UAW’s GM department, said in a statement. “At the UAW we are — all in — to find ways to partner together to flatten this curve and save lives.”
Earlier Friday, Trump lashed out at GM, Barra and Ford Motor Co. via Twitter, urging them to quickly build ventilators and suggested he could invoke the Defense Production Act.
GM and Ford announced earlier they were working with companies to help boost ventilator production in recent days. Many Democrats including New York Gov. Andrew Cuomo have urged Trump to invoke the Defense Production Act and require industrial companies to build medical equipment.
Trump also attacked GM for closing an assembly plant last year in Ohio, a state key to his re-election in November. GM sold the Lordstown, Ohio, assembly plant to an electric truck startup.
“General Motors MUST immediately open their stupidly abandoned Lordstown plant in Ohio, or some other plant, and START MAKING VENTILATORS, NOW!!!!!! FORD, GET GOING ON VENTILATORS, FAST!!!!!!” Trump wrote on Twitter.
“They said they were going to give us 40,000 much needed ventilators, ‘very quickly’. Now they are saying it will only be 6000, in late April, and they want top dollar,” Trump said on Twitter of GM.
The Twitter missives were a remarkable turnabout from Thursday, when Trump told Fox News he wasn’t invoking the Cold War-era Defense Production Act to compel manufacturers to make ventilators because companies including GM had already stepped up.
Trump and other White House officials have also suggested some states and cities are overstating how many ventilators will be required to help counter the outbreak.
Trump’s tweets and Friday order came after a New York Times report Thursday suggested the White House had backed away from announcing a major ventilator deal with GM and Ventec because the price tag was too high. That drew significant criticism from Democrats.
The Federal Emergency Management Agency, the U.S. government’s lead in directing the coronavirus response, is evaluating other bids as well, the Times reported.
The price tag for GM’s bid to supply ventilators was more than $1 billion, the paper said, with several hundred million dollars to be paid upfront to the automaker.
Ford Motor Co. said it’s also “pulling out all the stops” to build ventilators and other devices needed to deal with the pandemic.
Ford is already delivering tens of thousands of face shields to hospitals and police, Mark Truby, the automaker’s vice president of communications, said in a tweet Friday.
Truby also said Ford is “working flat-out” with General Electric Co. to produce ventilators and 3M Co. to boost production of air-purifying respirators in a partnership announced three days ago.
Other automakers are also working to produce ventilators, masks and other medical equipment.
On Friday, Toyota Motor Corp. said it was “finalizing agreements to begin working with at least two companies that produce ventilators and respirators to help increase their capacity.”
New York City Mayor Bill be Blasio on Friday said on Twitter that Tesla Inc. had agreed to donate hundreds of ventilators to hospital intensive care units in New York City and the state of New York.
Tesla CEO Elon Musk in response said the electric carmaker was helping locate and deliver existing ventilators.
Tesla on Friday did not respond to a request for comment on where it got the ventilators from and whether the company was producing any ventilators of its own, something Musk has said the company will do.
Fiat Chrysler Automobiles and Ferrari previously said they were exploring making ventilators in Italy.
David Phillips, Hannah Lutz, Audrey LaForest, Reuters and Bloomberg contributed to this report.
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