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GM and Ventec get $489.4 million order from U.S. for 30,000 ventilators in coronavirus fight

Geoff Baker, The Seattle Times on

Published in Business News

Bothell, Wash.-based Ventec Life Systems saw the biggest single order for its portable VOCSN ventilator Wednesday when the federal government requested 30,000 of the life-sustaining machines for $489.4 million.

The Department of Health and Human Services placed the order through Ventec's partner, General Motors, which is to produce 6,132 machines by June 1 and the rest by August. Ramping up production lines at a GM plant in Kokomo, Indiana, ordinarily used to build precision car parts, is expected to take several weeks.

Ventec chief strategy officer Chris Brooks said Wednesday that while his company continues to boost its own production in Bothell -- projected to increase nearly tenfold to 2,000 ventilators a month by summer -- the government contract focuses only on units being built in Indiana.

"Our focus right now is doing everything to get those GM units online," Brooks said, adding that a team led by Ventec design and production engineers has been traveling back and forth to the Indiana plant for two weeks.

It was unclear before Wednesday whether Ventec or GM would be the primary contractor on the deal as both were directly involved in negotiations. Suppliers have said GM was paying them directly.

"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," said Health and Human Services Secretary Alex Azar.

 

President Donald Trump invoked the Defense Production Act on March 27, effectively ordering GM to build ventilators. The wartime-era law allows the federal government to force companies to build needed supplies.

GM and Ventec earlier that day had already announced they would produce the ventilators after the Trump administration backed off an announcement of a deal to buy the devices. In tweets that day, Trump slammed GM, imploring the company to "START MAKING VENTILATORS NOW!!!!!!"

"GM and Ventec Life Systems are working with speed and urgency to arm front-line medical professionals with the critical care ventilators they need to treat seriously ill patients," GM said in a statement Wednesday. "GM is proud to deploy its purchasing and manufacturing capability alongside the respiratory care expertise of Ventec. We will continue to explore ways to help in this time of crisis."

Ford is also planning to produce ventilators, partnering with Florida-based Airon.

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