Trump orders GM to make ventilators for the government
President Donald Trump on Friday signed a presidential memorandum to require General Motors Co. to make ventilators for the federal government despite the Detroit automaker saying it already was moving closer to producing thousands of the devices in Kokomo, Indiana.
"Today, I signed a Presidential Memorandum directing the Secretary of Health and Human Services to use any and all authority available under the Defense Production Act to require General Motors to accept, perform and prioritize federal contracts for ventilators," the president said in a statement, referring to the Korean War-era statute he invoked last week allowing the government to call upon private business for the sake of national defense.
"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. GM was wasting time. Today’s action will help ensure the quick production of ventilators that will save American lives."
But GM said it's already "working around the clock" with Bothell, Washington-based Ventec Life Systems and its suppliers to help boost production of its medical devices that help COVID-19 patients in severe cases breathe. Ventilators built at Kokomo Operations could be shipped as early as next month, and GM said it's donating its resources at cost.
"Our commitment to build Ventec’s high-quality critical care ventilator, VOCSN, has never wavered," the company said in a statement following Trump's order. "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 entire GM team is proud to support this initiative."
The memorandum came after Trump took to Twitter earlier in the day to slam GM and CEO Mary Barra over reneging on plans to build the ventilators. The allegation is flatly untrue, according to GM. It is setting up manufacturing capacity at its 2.6 million-square-foot Kokomo facility, and the company has begun hiring a workforce.
"As usual with 'this' General Motors, things just never seem to work out," Trump wrote. "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. Always a mess with Mary B."
In the press conference Friday evening at the White House during which Trump referred to Gov. Gretchen Whitmer as "the woman in Michigan," Trump also criticized GM for opening plants outside of the United States, abandoning its former Lordstown Assembly Plant in northeast Ohio and backtracking on its commitment to produce ventilators.
“We don’t want to get in a big deal on price," Trump said. "We are not looking to be ripped off on price. We don’t want prices to be double, triple what they should be. ... So, General Motors, we will see what happens, but now they are talking, but they weren’t talking at the right way in the beginning and that was not right to the country."
In a statement, U.S. Rep. Andy Levin, D-Bloomfield Township, said he has called on the president to use the Defense Product Act to address the pandemic: “However, the Defense Production Act 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 continued.
"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.”
GM is not seeking any money from the government, said two sources familiar with the discussions who were not permitted to speak publicly. The automaker is working as a contract manufacturer for Ventec, which needs money to pay its suppliers to boost production. Ventec is looking for several hundred million dollars, according to the people.
The companies earlier this week were preparing to announce a deal with the federal government, the people said, but the Trump administration's Federal Emergency Management Agency is evaluating the number of ventilators it wants to order.
“We are proud to stand with other American companies and our skilled employees to meet the needs of this global pandemic,” Barra said in a statement 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."
The companies have secured suppliers for the more than 700 parts needed. They intend to build up to 200,000 of Ventec's portable VOCSN ventilators with Kokomo producing 10,000 per month and possibly more.
“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 statement. “This pandemic is unprecedented and so is the response, with incredible support from GM and their suppliers. Healthcare professionals on the front lines deserve the best tools to treat patients, and precision critical care ventilators like VOCSN are what is necessary to save lives.”
GM plans to assemble the ventilators with 1,000 employees who would be paid. With support from the United Auto Workers, it's drawing its volunteer workforce from its 392 employees in Kokomo and 891 employees at Marion Metal Center almost 30 miles away.
"We are happy to work with GM during this pandemic for the health and safety and good of our Nation as we collaborate towards the production of ventilators," said Terry Dittes, UAW vice president and director of the GM Department, in a statement. "The UAW has a proud history of stepping up in times of national emergency. General Motors should be commended for stepping up at a crucial moment in our history."
Suppliers also continue to move forward with plans to make as many as 20,000 ventilators per month, said Todd Olson, CEO of Minnesota-based Twin City Die Castings Co., which is making 14 parts for the ventilators.
"Actually from our standpoint, we're ahead of schedule," said Olson, noting the pace is taking less than 10% of the time a normal project of this scale would. "We're going full speed ahead."
After casting its first parts for the devices on Thursday, the company was ready to machine them on Friday. Olson hopes to have usable parts ready on Saturday. The company has been directed to ship them to Washington and Kokomo.
"I've told everybody to continue to move as fast as possible, and let the other folks sort it out," Olson said concerning reports of the government contract.
It is not clear that GM is dragging its feet on the ventilator project, said Erik Gordon, a professor at the University of Michigan's Ross Business School.
"You can’t just be producing SUVs one day, and then two weeks later, be producing ventilators," he said. "If GM is to be believed, they have used their global procurement prowess to scout up the parts from around the world — that is a surprising amount of progress. I'm not sure what led to the president's reaction as opposed to congratulating GM and encouraging them to continue as fast as possible and encourage other companies to follow suit."
GM also said it will make surgical masks by temporarily converting its closed Warren Transmission Plant. Production will begin Monday and ramp up to make 50,000 masks per day within two weeks. It hopes eventually to make 100,000 masks per day based on material availability. GM will work with governments and local suppliers to distribute them.
Trump also called for GM to make the medical devices at its Lordstown plant. Electric-vehicle start-up Lordstown Motors Corp. purchased the building for $20 million in November — a deal that Trump himself pre-emptively lauded in May on Twitter. Lordstown Motors now is preparing for December production of its electric pickup, the Endurance.
"General Motors MUST immediately open their stupidly abandoned Lordstown plant in Ohio, or some other plant, and START MAKING VENTILATORS, NOW!!!!!!" Trump tweeted Friday. "FORD, GET GOING ON VENTILATORS, FAST!!!!!!"
Ford Motor Co. this week said it was partnering with the 3M Co. and GE Healthcare to boost production of powered air-purifying respirators and ventilators, respectively. The ramp-up was expected to happen in the coming days and weeks, the Dearborn automaker said Tuesday. It also began delivering to hospitals and police agencies, including in New York, tens of thousands of face shields made at its subsidiary, Troy Design & Manufacturing Co. in Plymouth.
“Ford is pulling out all the stops to quickly and safely provide vitally needed equipment for patients, first responders and healthcare workers," company spokesman Mike Levine said in a statement. "Ford is in active conversations with the Administration, seeking guidance about approvals, scope and distribution relating to a series of products, including ventilators."
Fiat Chrysler Automobiles NV, meanwhile, installed equipment to make face masks in China and expects in the coming weeks to donate them to first responders and health-care workers in the U.S. elsewhere. The automaker also hopes to do so at other facilities. Additionally, after working with Siare Engineering International Group in Italy to increase production of ventilators there, FCA is discussing doing so with more manufacturers of the devices and other medical equipment and supplies.
Fiat Chrysler also said it is providing more than one million meals to school-age children in communities around its principal plants in Michigan, Illinois, Indiana and Ohio with the hope of extending it to other areas of North America.
“There has never been a more important moment," FCA CEO Mike Manley said in a statement, "to help children and their families with vital needs in our communities than during this time of great uncertainty."
Staff Writer Keith Laing contributed.