GM to partner with ventilator manufacturer amid COVID-19 outbreak
General Motors Co. is partnering with a Seattle area-based ventilator manufacturer to boost production of the medical devices needed to help seriously ill COVID-19 patients, the companies said Friday.
The Detroit automaker is offering its logistics, purchasing and manufacturing expertise to help Ventec Life Systems build more of its ventilators. The two companies are joined in the collaboration by StopTheSpread.org, an private sector advocacy group that aims to "unite business leaders across the country to collect resources to complement and support government efforts" to battle the spreading virus.
“We are working closely with Ventec to rapidly scale up production of their critically important respiratory products to support our country’s fight again the COVID-19 pandemic,” GM CEO Mary Barra said in a statement. “We will continue to explore ways to help in this time of crisis.”
Added Chris Kiple, CEO of Ventec Life Systems: "With GM’s help, Ventec will increase ventilator production. By tapping their expertise, GM is enabling us to get more ventilators to more hospitals much faster. This partnership will help save lives.”
The move comes a President Donald Trump invokes the Defense Production Act, a measure dating back to the Korean War that provides the federal government broad authority to direct private companies to meet national defense needs.
"I can't say they are, but they will be very shortly," Trump said during a White House briefing about the possibility of automakers making ventilators. "They will be very shortly. Because we are working with one in particular that wants to make ventilators. They called us yesterday, and they already were working on a transaction. They say they've done it before, but they can do it easily."
Trump later confirmed that the automaker was GM. The Detroit automaker's shares closed up 2.4% on Friday as market indexes were down.
"A closer public-private partnership between the Big Three and the Beltway would be view positively in terms of the longer-term potential impact," said Dan Ives, an analyst for Los Angeles-based Wedbush Securities Inc.
Ford Motor Co. also has said it is assessing the feasibility of making the life-saving devices and other medical supplies following contacts by both the U.S. and U.K. governments. Fiat Chrysler Automobiles NV has offered to help Siare Engineering International Group, the Italian ventilator manufacturer has said.
"We are looking at all possible ways to help," FCA spokesman Kevin Frazier said in a statement. And Tesla Inc. is investigating the idea, but CEO Elon Musk cast doubt on it coming to fruition.
"We’re working on ventilators," Musk wrote in a tweet, "even though I think there will not be a shortage by the time we can make enough to matter."
Ventilators are sophisticated machines with many hardware parts as well as software. Their assembly requires some technical training, experts say. And it can take years to receive approval from regulators like the federal Food and Drug Administration to build such devices.
But automakers have engineering know-how and infrastructure that may help manufacturers ramp-up production. Their influence and connections also may help to secure the parts needed.
"We are grateful for the partnership between GM and Ventec Life Systems, which will enable Ventec to drastically scale production of critically needed respiratory care products," StopTheSpread.org said in a statement. "This is a vital step in delivering relief to our healthcare system, which is threatened by the spread of COVID-19."
Studies predict COVID-19 cases could overwhelm U.S. hospitals and cause a shortage of the ventilators that help people to breathe — even with a national stockpile of roughly 15,000 devices with support from the Defense Department. And while ventilator shortages could become a problem in the future, hospitals are in need of other supplies such as face masks.
“All three companies have volunteered to help," Rep. Debbie Dingell, D-Dearborn, told The Detroit News. "They’re actually in talks with the right people to figure out what’s the fastest and best way to help. Also, they’re looking not only at ventilators but also personal protection equipment.”
Manufacturers all over the world from perfume companies to Apple Inc. contractor Foxconn Technology Group have refitted factories to support the effort, making hand sanitizers, disinfectants and masks. Chinese manufacturer BYD opened assembly lines to make five million masks a day.
The automakers' proposals come as Tesla plans to shut down its Bay Area plant on March 23. Earlier this week, Detroit's three automakers agreed to suspend temporarily and progressively production at their North American facilities following an outcry from the rank-and-file and amid pressure from labor unions.
The Detroit Three helped the city to become the "arsenal of democracy" during World War II by retooling assembly lines to build bombers, tanks and trucks for the Allied powers.
"They have expertise in manufacturing and a base engineering workforce," said Jessica Caldwell, executive director of industry analysis at auto information website Edmunds.com Inc. "It's not their line of business, but it's been done before. It shows great patriotism to step up and be of assistance."
Detroit News Staff Writer Keith Laing contributed.