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Trump administration backs off a deal for Ventec and GM to produce 'up to 20,000' ventilators a month amid coronavirus crisis

Geoff Baker, The Seattle Times on

Published in Political News

Bothell, Wash.-based Ventec Life Systems was at the center of a national storm late Thursday when it was reported the Trump administration pulled back from a deal for the company and General Motors to begin producing what one supplier said would soon be "up to 20,000" life-saving ventilators a month.

The "Project V" deal, brewing since last week in response to the coronavirus crisis, would have launched in early April at the automaker's electronics assembly plant in Kokomo, Indiana, and taken Ventec from a monthly production capacity of 250 to more than 1,000 during a ramp-up phase. By May, the goal was several thousand more machines in what one source close to the process -- who wasn't authorized to speak publicly -- described as a "historic" effort to rapidly meet escalating demands as hospitals become overwhelmed by patients with COVID-19, the illness caused by the novel coronavirus.

The deal was to have been announced Wednesday, but by Thursday afternoon the source indicated the federal government might be delaying the rollout. By Thursday night, the New York Times, quoting unnamed government officials, reported the Federal Emergency Management Agency wanted more time to assess whether the $1 billion price tag for the venture was prohibitive.

Those officials said the deal isn't dead, but the government is weighing "a dozen or more" other proposals and questioning whether the 20,000 monthly target is reachable. Multiple sources familliar with the situation, requesting anonymity, later confirmed to The Seattle Times that the Trump administration had indeed delayed the Wednesday announcement.

GM spokesman Daniel Flores said in a release Thursday night that all parts for the ventilators have been acquired "through a Herculean effort" and efforts are underway to reconfigure the Kokomo plant. "The Ventec and GM team is working around the clock to meet the need for more ventilators," Flores said.

According to sources, the Trump administration on Sunday put out a Request for Information (RFI) seeking ventilator production on a mass scale with an "unheard of" deadline the following day. The tight 24-hour turnaround time was met by the Ventec-GM team with multiple scenarios of varying production amounts and costs, after which the federal government extended the RFI deadline until Tuesday to attract competing offers.

 

Top GM purchasing agents had been dispatched Sunday from Warren, Michigan, to visit Ventec's Bothell plant and by Tuesday -- working with Ventec's purchasing team -- had arranged for the acquisition of 95% of parts needed to build the ventilators on a mass scale. The final 5% were acquired by Wednesday.

Todd Olson, CEO of Minneapolis-based Twin City Die Castings -- an automotive and medical parts maker supplying about 20 of those ventilator components -- said Thursday the project's goal is to produce thousands of the machines within a month or two and 200,000 total.

"We've looked at a number of different scenarios up to 20,000 a month," Olson said, adding he's been told the companies have targeted August for reaching that high-end figure. "I don't know where it's going to end up.... There are a number of different scenario plannings. It's going to be big. It's going to be thousands a month for sure."

Olson cautioned that such a massive expansion in production can't happen overnight. "It's going to take a period probably through the summer to get to maximum capacity," he said. "But they'll make a meaningful difference within a month or two."

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