President Donald Trump is using the Defense Production Act to require General Motors to manufacture ventilators to be used by overwhelmed hospitals – in a move that follows an angry blow-up online.
Democrats and administration critics have been pushing the Trump administration to use Korean War-era military authority to speed production of vital equipment. Trump has resisted until Friday, when he said he had signed a memorandum making a specific directive, after a deal with the automaker fell through.
‘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,’ Trump said, according to a statement released by the White House.
President Donald Trump said he signed an order directing the use of the Defense Production Act to force GM to produce ventilators – equipment the company said it already is partnering to manufacture
‘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,’ he continued. ‘GM was wasting time. Today’s action will help ensure the quick production of ventilators that will save American lives.’
Trump had referred to the act in a tweet earlier Friday, though he oddly said he would ‘invoke ‘P” – which he later explained meant the law.
The law allows the federal government to force manufacturers to make items that are in short supply and meet a pressing national need.
The statement did not say whether the directive would force manufacturing at a shuttered Ohio plant, as Trump is demanding.
GM is already trying to set up manufacturing.
It said its team has been ‘working around the clock for over a week to meet this urgent need.’
A plan to have General Motors partner with another company to produce thousands of ventilators has stalled after Trump administration officials raised concerns about a price tag of more than $1 billion
It mentioned a planned partnership with Ventec in a statement that did not mention Trump invoking the law.
‘Our commitment to build Ventec’s high-quality critical care ventilator, VOCSN, has never wavered,’ the automaker said in a statement, CNBC reported. ‘The partnership between Ventec and GM combines global expertise in manufacturing quality and a joint commitment to safety to give medical professionals and patients access to life-saving technology as rapidly as possible. The entire GM team is proud to support this initiative.’
‘I have instituted it against General Electric,’ Trump said at the White House Friday, accidentally referencing another powerhouse company.
‘We thought we had a deal for 40,000 ventilators and all of a sudden the 40,000 came down to 6,000. Then they talked about a higher price than we were discussing so I didn’t like it. So we did activate it with respect to General Motors,’ Trump continued. Then he hedged: ‘Maybe we won’t even need the full activation, we’ll find out.’
According to the Detroit News, GM is not seeking funds from the government, although its Ventec partner needs funds to pay suppliers.
The company plans to do the work at its Kokomo Indiana plant, with 1,000 workers coming from that plant and the nearby Marion Metal Center. It is working with the United Auto Workers to assemble a volunteer force of workers who would get paid.
Earlier Friday, Trump insisted General Motors start manufacturing desperately needed ventilators ‘NOW’ – after a stunning report his administration stalled a potential deal over the cost.
After sustaining weeks of questions and criticisms about why his administration hadn’t demanded rush orders for medical equipment weeks ago, Trump took to twitter to demand GM get on the task ‘FAST.’ He even demanded they reopen a shuttered Ohio plant – even though the company has already put forward a proposal to start assembly at a plant in Indiana.
The company sold the plant in November to electric vehicle startup Lordstown Motors Corp., meaning it no longer owns the facility.
General Motors MUST immediately open their stupidly abandoned Lordstown plant in Ohio, or some other plant, and START MAKING VENTILATORS, NOW!!!!!! FORD, GET GOING ON VENTILATORS, FAST!!!!!!’ Trump wrote.
Trump also teed off on the company in an additional tweet, blaming the firm for the breakdown in the deal – amid signals that the Big Three manufacturer’s hometown of Detroit is in for some difficult days of shortages due to the coronavirus.
‘As usual with ‘this’ General Motors, things just never seem to work out. They said they were going to give us 40,000 much needed Ventilators, ‘very quickly’. Now they are saying it will only be 6000, in late April, and they want top dollar. Always a mess with Mary B. Invoke ‘P’, Trump wrote.
He was referencing company chair and CEO Mary Barra. His reference to ‘P’ was unclear until the president weighed in with another tweet minutes later. ‘Invoke ‘P’ means Defense Production Act!’ he wrote, in reference to the Korean War law that can be used to coerce firms into production.
Trump has for days resisted using the Act, which he and his administration have said is not necessary due to cooperation from businesses Trump says are calling the White House to assist in the outbreak.
Trump has called himself a wartime president, and G.M. is among the firms that contributed to a massive armament of the U.S. and allies during emergency production during World War II.
A plan to have GM partner with another company to produce thousands of ventilators amid the coronavirus crisis has been stalled this week over government concerns about cost and potentially ending up with too many of the life-saving products, according to a stunning report.
Trump demanded GM reopen an Ohio plant and start making ventilators. The firm already has a proposal to make them in Indiana through a joint venture
Trump attacked the firm and described its proposal, singling out the company’s CEO
Trump explained his vague statement: ‘Invoke ‘P”
Trump said the government purchased ‘many Ventilators’ from ‘wonderful’ companies
A plan to have the top U.S. automaker partner with Ventec Life Systems was on the verge of being reached this week, before a Wednesday announcement got cancelled and FEMA stepped back from the potential $1 billion deal, the New York Times reported.
The potential joint venture could produce thousands of ventilators, as New York Gov. Andrew Cuomo says his state needs 30,000 of them and is far short of that allotment.
The stalled agreement comes as President Donald Trump has publicly doubted the needs expressed by Cuomo and other governors – as public health experts ask why urgent orders weren’t made weeks ago when the virus was ravaging Asia.
‘I think that a lot of things are being said that are more, I don’t think certain things will materialize, a lot of equipment is being asked for but I don’t think they’ll need,’ Trump told conservative talk host Sean Hannity in a call-in interview Thursday night.
‘Governor Cuomo and others they say they want 30,000 of them. Thirty thousand!’ Trump told Hannity. ‘Think of this, you go to hospitals and they have one. And now all of a sudden everybody is asking for these vast numbers.’
GM said last week it was looking at ways to boost Ventec’s production, and said days ago it was ‘exploring the feasibility’ of using its Kokomo, Indiana plant for production.
The stalled deal could have cost $1.5 billion but would produce thousands of ventilators for desperately crunched hospitals
GM has said an Indiana plant might be able to serve as the assembly line for the joint venture
Hospitals and governors are pleading for more supplies
Health officials have warned the equipment shortage is a crisis as the outbreak spreads
‘Both GM and Ventec continue to work hard looking at how to make more ventilators, and we are continuing to assess how we can use Kokomo,’ a GM spokesman said.
The deal could have cost $1.5 billion, or $18,000 per ventilator, according to the Times. While a substantial sum, it would pale in comparison to the $2 trillion price tag of the coronavirus bailout package that the House is set to vote on.
But FEMA officials working with the White House determined the cost was ‘prohibitive,’ according to the Times.
Hospital officials are concerned that without more of the devices, they will have to make decisions to ration care and deny treatment to patients with a lower chance of survival – as has happened in Italy amid shortages.
Trump tweeted Sunday: ‘Ford, General Motors and Tesla are being given the go ahead to make ventilators and other metal products, FAST! @fema,’ he wrote. ‘Go for it auto execs, lets see how good you are?’
Detroit Mayor Mike Duggan, who previously ran the Detroit Medical Center, called for national leadership amid nationwide equipment shortages, with coronavirus cases climbing in his state and city.
‘Every mayor and governor in this country are fending for themselves,’ he told CNN Friday. ‘We really need some national leadership,’ he said.
On Wednesday FEMA was considering multiple proposals before forwarding a recommendation to Trump son-in-law Jared Kushner, who has been given an oversight role on the issue, according to the Times.
No deal got announced at a White House press briefing Thursday.