General Motors (GM) is the first company to sign a government contract under the recently invoked Defense Production Act (DPA), with a commitment to producing 30,000 ventilators as the COVID-19 surge strains supplies.
The Health and Human Services Department (HHS) announced Wednesday that GM has signed the contract, worth $489.4 million, under the Korean War-era emergency statute.
President Donald Trump invoked the act around two weeks ago after criticizing GM for not moving quickly enough to manufacture the life-saving devices amid the fast-spreading CCP virus outbreak.
Trump said in a March 27 statement that the action “will help ensure the quick production of ventilators that will save American lives.”
“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,” the president said at the time.
Under the contract, General Motors will supply the ventilators to the Strategic National Stockpile, with a June 1 deadline for delivery of the first batch of 6,132 devices. A GM spokesman told CNBC that production is expected to start next week.
General Motors said in a statement Wednesday that is working with ventilator manufacturer Ventec Life Systems “with speed and urgency to arm frontline medical professionals with the critical care ventilators they need to treat seriously ill patients.”
HHS Secretary Alex Azar said in a statement that the ventilators will be “routed through the Strategic National Stockpile to where they’re needed most.”
“The Trump administration has deployed thousands of ventilators from the Strategic National Stockpile that have helped save lives in hotspots such as New York so far. We’re grateful to the GM team for working with the federal government to expand our nation’s supply of ventilators as the pandemic evolves,” Azar said.
“We remain dedicated to working with the administration to ensure American innovation and manufacturing meet the needs of the country during this global pandemic,” GM said.
This comes after GM said earlier it would build around 10,000 new ventilators per month at its plant in Kokomo, Indiana. In an April 6 tweet, the company said training was underway for the first wave of employees who volunteered to build the devices.
“We expect to ramp up to mass production in less than two weeks,” GM said.
Training is underway for the first wave of employees who have volunteered to build @MyVOCSN’s life-saving ventilators at our Kokomo, IN, plant. We expect to ramp up to mass production in less than two weeks. Learn more about our rapid progress: https://t.co/NacKQprNVp pic.twitter.com/OHAOO4HK8L
— General Motors (@GM) April 3, 2020
Among those training to make ventilators is Debbie Hollis of Kokomo, GM said in a statement.
“I have family all across the country, so [the CCP virus] has impacted everybody that I know and love,” Hollis said. “I’m grateful that I get a chance to do my part and be a part of something … we are modern-day Rosie the Riveters.”
GM said employees would be subjected to numerous safety procedures to minimize the risk of contagion amid the pandemic, including “extensive screening, cleaning, and other CDC-recommended procedures.”
“The men and women building these ventilators raised their hands to help save the lives of people suffering from COVID-19,” said Dr. Jeffery E. Hess, GM corporate medical director.
The company said the Kokomo team working on ventilator construction would grow to over 1,000 staff members.