GM and Feds Announce Ventilator Deal

The President has invoked the Defense Production Act, locking General Motors into a pact to build truckloads of the life-saving equipment.

As reported by CNBC, federal officials say the automaker will add 30,000 ventilators to the federal stockpile by the end of August, with the deal carrying a price tag of $489.4 million. The publication confirmed that GM will not make a profit off the effort.

Amid large coronavirus outbreaks in New York City, Detroit, and other locales, most automakers are doing their part in providing personal protective equipment to hospitals and state health agencies, but ventilators are a complicated piece of kit. They’re not cheap, either.

GM partnered with Ventec Life Systems to make the order possible. Despite media reports claiming a lofty sale price for the units, the agreement with the feds shows a per-unit price of $16,000, well below the $50k price tossed around last week.

Production starts next week, with the Department of Health and Human Services claiming the first batch of over 6,100 ventilators due for delivery at the beginning of June. While the production surge could be seen as coming too late for the onset of the pandemic, it’s crucial for future outbreaks. Many health officials anticipate a second or even third wave of the virus over the next 18 to 24 months.

Production will take place at GM’s underutilized Kokomo, Indiana components plant, where the company expects to employ 1,000 workers on the ventilator initiative. It’s good news for UAW Local 292, which has long sought to boost the plant’s workforce.

“We remain dedicated to working with the Administration to ensure American innovation and manufacturing meet the needs of the country during this global pandemic,” said GM in a statement.

a version of this story first appeared on TTAC