President Trump Orders General Motors to Make Ventilators under Defense Production Act
Posted on 03/27/2020
As the Wuhan coronavirus (COVID-19) pandemic spreads across the United States, hospital capacity for ventilators is at risk. U.S. Donald Trump ordered General Motors to make ventilators under the Defense Production Act. This is hours after Trump criticized General Motors for not acting quickly enough to produce the supplies.
The order comes after General Motors revealed plans to build critical-care ventilators with Ventec Life Systems at one of the automaker’s components plants in Kokomo, Indiana. Ventec has a manufacturing facility in Bothell, Washington. Ventec produced 250 ventilator units in February 2020. GM will also begin manufacturing FDA-cleared Level 1 surgical masks at its Warren, Michigan manufacturing facility. General Motors had promised for more ventilators, but came up short in their most recent forecast. Various media outlets quoted unnamed government officials that the U.S. Federal Emergency Management Agency (FEMA) was wondering if the more than US$ 1 billion price tag was prohibitive and whether the 20,000 monthly target was reachable. The proposed payment plan to General Motors included several hundred million dollars to be paid upfront for the car company to re-engineer an auto plant in Kokomo. The United States has between 160,000 and 200,000 ventilators, but more than 1 million ventilators could be needed if the coronavirus spreads faster.
The Defense Production Act can force select U.S. companies to produce materials that are in short supply.
Statement from The White House on March 27, 2020, “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. 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.”
GM Bailout – Global Financial Crisis
The U.S. government’s $80.7 billion bailout of the auto industry lasted between December 2008 and December 2014. The U.S. Treasury Department lent money and bought stock ownership in General Motors and Chrysler.
| Company | Invested | Profit and Net Outstanding | Date Bailout Ended |
|---|---|---|---|
| General Motors (GM) | $50,744,648,329 | -$11,308,238,095 | December 9, 2013 |
| GMAC (now Ally Bank) | $16,290,000,000 | $3,057,502,589 | December 18, 2014 |
| Chrysler | $10,748,284,222 | -$1,212,849,005 | May 2011 |
Source: ProPublica.