By Geoff Baker / The Seattle Times
Moments into an initial conference call nearly two weeks ago, a proposed venture between Bothell-based Ventec Life Systems and General Motors to mass produce thousands of ventilators for the nation’s coronavirus fight appeared dead.
Ventec CEO Chris Kiple told GM’s global manufacturing chief, Gerald Johnson, that one of more than 700 components needed to build his company’s VOCSN ventilator was made by a factory in India where the entire region had been quarantined. While about 80% of VOCSN parts are made in the United States, that lone India holdup would derail any expanded production plans because the ventilator can’t work without that missing piece.
“GM literally sent people there that night to India to get boots on the ground to help us get that factory opened,” Kiple said Monday as the Project V venture between Ventec and GM continued feverishly. “It changed the conversation. We had to work with the government (in India), we had to work with GM. We had to understand what the issues were to get the factory back open.”
The challenge was one of dozens of supply and logistical challenges that Project V faced. Even getting the Indian factory running again solved only one problem, because its raw-material suppliers were also closed and GM and Ventec had to get them reopened as well.
Medical experts have warned of a ventilator shortage as hospitals become overwhelmed by patients sickened by COVID-19, the illness caused by the novel coronavirus. There are only 160,000 ventilators in the United States and another 12,700 in the National Strategic Supply; Dr. Anthony Fauci — spearheading the federal medical response — warned Sunday that millions could get COVID-19 and more than 100,000 could die.
On Monday, Ford and General Electric announced they too are joining forces to produce 1,500 ventilators by the end of April, 12,000 by June and 50,000 by July. The ventilators would be a cheaper version of an FDA-approved machine produced by Airon.
Ventec’s ventilator differs from others in that it’s the first multifunction unit — combining five machines into one — and portable at 18 pounds for remote or confined emergency spaces.
Kiple said his company had sought an expansion partner since early March but knew after 30 seconds of that initial phone call with GM, on March 19, he’d found a match. “Where we had talked to many other people, GM went into action,” Kiple said. “There was no talk … It was just, ‘What do you need?’ “
They secured enough needed components by last Tuesday for GM to produce up to 10,000 machines a month at its electronics component plant in Kokomo, Indiana. Ventec, which now produces 250 units monthly in Bothell, will expand to 2,000 there — giving the venture 12,000 ventilators a month by summer and capacity for more.
GM and Ventec overcoming their initial challenges buoyed both companies enough that they were unfazed by some political minefields later in the week.
Those began last Wednesday, when the federal government pushed back a planned announcement of Project V. Then on Friday morning, President Donald Trump stunned everybody with Twitter attacks accusing GM of reneging on ventilator-supply promises and price gouging.
Later that afternoon Trump invoked the Defense Production Act, effectively compelling GM to produce the ventilators despite the automaker having already announced hours earlier it would do exactly that with Ventec. Bewildered but undaunted, the companies pressed on through the weekend, preparing for what Kiple said will be a “mid-April” production launch in Indiana.
Kiple said he’s discussed a variety of production and price ranges with government agencies; price negotiations can’t begin until the Trump administration decides how many ventilators it wants. He said Trump’s use of the wartime law has had one very positive impact.
“It really helps just focus the country around the urgency for the need of ventilators,” Kiple said.
He’s still unsure how the venture made it this far.
The day after the initial March 19 phone call, with one GM team already in India, the automaker dispatched a second group of senior manufacturing experts from Michigan to Seattle.
They arrived that night and met at Ventec’s headquarters the day the partnership was publicly announced. Ventec shared with GM the technical specifications for a variety of VOCSN configurations.
By March 22, GM had unleashed between 50 and 60 specialists from its vast global procurement team to secure parts. That morning, Ventec President Jeff Laub and GM Vice-President Ron Daul, a plastics expert, visited Woodinville-based Cascadia Custom Molding and met with CEO Dale Meyer.
Cascadia supplies 26 components for VOCSN — including a crucial chassis that 48 other parts plug in to. GM and Ventec at the time had contemplated building 200,000 ventilators at a rate of 20,000 a month and needed to know whether the chassis could be produced quickly enough.
Meyer assured them it could be by switching from five-day-a-week production to seven. GM and Ventec later downsized their goal to a target of 10,000 a month and placed a $4 million order for 20,000 of each of 20 Cascadia parts including the chassis.
“They’ve assured us at least twice that regardless of what happens, they will pay for it and pay for any materials that we buy and that we should gear up and be ready to go,” Meyer said Monday.
To save weeks of time, the custom high-gloss paint job Meyer typically ships the parts out to have done will be skipped. Only 20 of the 26 Cascadia parts Ventec normally uses were ordered, a sign the ventilators will be modified slightly.
Ventec confirmed that there are eight possible VOCSN configurations and that the Project V venture is considering the most efficient and practical.
A day after Ventec and GM met with Meyer, the Trump administration put out a request for information with an urgent 24-hour deadline to companies seeking ventilator production and pricing ranges. Ventec and GM responded last Monday, having already secured most parts needed.
The government extended the request to last Tuesday with additional questions, which Ventec and GM replied to. By then, they’d acquired all parts and expected a Wednesday announcement of the venture by the Trump administration.
But that never happened. Instead, conversations continued as government agencies tried to pin down the number of ventilators they wanted.
Despite the delay, Ventec that day dispatched a five-member team to Indiana, led by its vice president of engineering, Joe Cipollone, to explain VOCSN to GM workers who’ll oversee production. GM spokesperson Dan Flores said Monday workers were finishing interior demolition ahead of installing new equipment.
The company is also finalizing plans to train some of the 1,000 workers partaking in the venture on VOCSN specifications and to upgrade safety protocols and spacing to avoid COVID-19 infections.
On Saturday, one day after Trump invoked the wartime law, Ventec and GM held a conference call with nationwide suppliers, promising weekly updates on part needs. Meyer said he took a call Monday telling him to stand by for a possible order of 30,000 additional units by next week.
That would suggest plans to build 50,000 ventilators could be imminent.
Kiple wouldn’t confirm a final tally, saying GM, Ventec and the government will use the next two weeks to get a firmer grasp on how many ventilators are needed.
Kiple remains on the phone daily making sure the ability to build what’s needed is available come mid-April. Sleep is minimal, and he said some calls, especially from overwhelmed hospital staff, take an emotional toll.
“When you try to get to the moon, you know where it is and can look at the moon,” he said. “We don’t know where this is. It’s a moving target. We don’t know how big it’s going to be and it’s incredibly challenging.”