Trump Invokes Defense Production Act, What This Means For GM
President Trump said Friday that he had directed Health and Human Services Secretary Alex Azar to require General Motors to begin making ventilators under the Defense Production Act to combat the coronavirus pandemic after negotiations with the automaker had stalled.
“Our negotiations with GM regarding its ability to supply ventilators have been productive, but our fight against the virus is too great to allow the give-and-take of the contracting process to continue to run its normal course,” Trump said in a statement, adding: “GM was wasting time.”
Experts say the U.S. is hundreds of thousands of breathing machines short of what it likely will need to treat a rapidly rising number of COVID-19 patients. New York, Michigan, Louisiana and the state of Washington have been singled out as virus hot spots in the U.S.
In a statement, GM said it has been “working around the clock for over a week” with medical device company Ventec Life Systems and parts suppliers to build more ventilators. The company said its commitment to build Ventec’s ventilators “has never wavered.”
“The partnership between Ventec and GM combines global expertise in manufacturing quality and a joint commitment to safety to give medical professionals and patients access to life-saving technology as rapidly as possible,” the statement went on. “The entire GM team is proud to support this initiative.”
Trump said that while the White House activated the act against GM, it may not be needed. “Maybe we won’t even need the full activation. We’ll find out,” Trump said Friday in the Oval office.
The announcement came hours after Trump lashed out at GM and its CEO, Mary Barra, in a series of tweets.
“As usual with ‘this’ General Motors, things just never seem to work out. 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,” he wrote.
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“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!!!!!!” he tweeted.
GM sold the Lordstown plant to a company that wants to make electric commercial vehicles.
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Trump criticized Barra, saying: “Always a mess with Mary B.”
The tweets were an apparent response to a New York Times report that a $1 billion deal between the White House and the company was called off. The contract would have allowed the production of 80,000 ventilators.
Trump’s move appears aimed at price and volume negotiations with the government. But it’s Ventec, not GM, that is talking with the government, said Chris Brooks, Ventec’s chief strategy officer.
Ventec ventilators, which are portable and can handle intensive care patients, cost about $18,000 each, Brooks said. That’s much cheaper than the more sophisticated ventilators used by hospitals that can cost up to $50,000, he said.
The Federal Emergency Management Agency has made multiple requests since Sunday for estimates of how many ventilators it can build at what price, and has not settled on any numbers, according to Brooks. That could slow Ventec’s efforts to ramp up production because it doesn’t know how many breathing machines it must build, he said.
Former Vice President Joe Biden praised Trump’s announcement during a virtual roundtable with first responders.
“The good news I just heard about ten minutes ago.. is that president has just finally implemented the act and he’s ordered GM to make ventilators,” Biden said. “That’s really good news. Now we were suggesting he do that over a month ago but the point is he’s done it and I congratulate him for it.”
Fox Business’ Matthew Kazin, Fox News’ Paul Steinhauser, Gary Gastelu and the Associated Press contributed to this report.
Author: Louis Casiano