Kurt Miller prepares machines for shipment at Ventec in Bothell on March 18. (Greg Gilbert/The Seattle Times/TNS, file)

Kurt Miller prepares machines for shipment at Ventec in Bothell on March 18. (Greg Gilbert/The Seattle Times/TNS, file)

Trump uses wartime act but GM, Ventec are already moving fast

The carmaker is working with the Bothell company to produce up to 10,000 ventilators per month.

By Tom Krisher / Associated Press

DETROIT — Twelve days ago, General Motors put hundreds of workers on an urgent project to build breathing machines as hospitals and governors pleaded for more in response to the coronavirus pandemic.

But President Donald Trump, claiming the company wasn’t moving fast enough, on Friday invoked the Defense Production Act, which gives the government broad authority to direct companies to meet national defense needs.

Experts on managing factory production say GM is already making an extraordinary effort for a company that normally isn’t in the business of producing ventilators.

“That is lightning-fast speed to secure suppliers, learn how the products work, and make space in their manufacturing plant. You can’t get much faster than that,” said Kaitlin Wowak, a professor at the University of Notre Dame who focuses on industrial supply chains.

GM expects to start making ventilators in mid-April, ramping up to a rate of 10,000 per month at as quickly as it can. The company is working with Ventec Life Systems, which makes small portable ventilators in Bothell, and both say the Defense Production Act of 1950 doesn’t change what they’re doing because they’re already moving as fast as they can, fronting millions in capital with an uncertain return.

“I don’t think anybody could have done it faster,” said Gerald Johnson, GM’s global manufacturing chief.

Peter Navarro, Trump’s assistant for manufacturing policy, said Saturday that invoking the act was needed because GM “dragged its heels for days” in committing to the investments to start making ventilators at an automotive electronics plant in Kokomo, Indiana.

It was only a few days earlier that Trump had been holding up GM and Ford as examples of companies voluntarily responding to the outbreak without the need for him to invoke the act. Then on Friday, he slammed GM on Twitter and during his daily briefing for foot-dragging. On Sunday, he was back to praising the company during another briefing: “General Motors is doing a fantastic job. I don’t think we have to worry about them anymore.”

But GM says it had been proceeding on the same course all along.

The company got into the ventilator business on March 18 after being approached by stopthespread.org, a coalition of CEOs trying to organize companies to respond to the COVID-19 disease that has already claimed more than 30,000 lives globally. The organization introduced GM to Ventec.

The automaker pulled together manufacturing experts, engineers and purchasing specialists, and the next day had people at Ventec’s facility, a short distance from a nursing home where the virus killed at least 35 people.

They worked on speeding up Ventec’s manufacturing. A few days later, GM assigned more engineers and purchasing experts to figure out how it could make Ventec’s machines. Some Ventec parts makers couldn’t produce enough widgets fast enough, so GM went to its own parts bin to find suppliers to do the job, Johnson said. At the same time, GM was shutting down its car and truck factories temporarily due to worker fears about the virus.

Erik Gordon, a University of Michigan law and business professor, said he thought Trump would commend GM and use it as an example for other manufacturers in the coronavirus fight.

“What came out was a smack on the head,” he said.

Gordon, who teaches a class in commercialization of biomedical goods, said Trump likely will claim credit when GM starts making the machines. “This is an election year, and on all sides you’re going to see political theater,” he said.

Critics have urged Trump to invoke the Defense Production Act broadly to control the production, supply and distribution of ventilators and protective gear for hospital workers who are running short. That’s what the act was meant to do, and it was not for use against a single company, Gordon said.

Even with increased production from all ventilator makers, however, the U.S. might not have enough of the life-saving machines. U.S. hospitals have about 65,000 of the ventilators that are sophisticated enough to treat critical coronavirus patients. It could probably cobble together a total of 170,000, including simpler devices, to help with the crisis, one expert says.

A doctor at the University of Nebraska Medical Center estimates that 960,000 people in the U.S. will need to be on ventilators, which feed oxygen into the lungs of patients with severe respiratory problems through a tube inserted down the throat. Doctors hope social distancing will stop a huge number of people from getting sick simultaneously, flattening the curve of the illness so they can use one ventilator to treat multiple patients.

Trump, in several appearances Friday, accused GM of promising 40,000 ventilators, then reducing the number to 6,000. He also said the company wanted higher prices than previously discussed.

Ventec, which is negotiating with the government to provide more ventilators, said it only changed numbers and prices at the request of government agencies, which asked for a range of quantities and prices. The company said it’s selling the ventilators, which can treat severe virus patients, at distributor cost, and it has offered scaled down versions for a lower price.

Up until late Sunday, Ventec and GM hadn’t known how many ventilators the government would buy but those details are now being worked out.

Ventec isn’t sure if it will make any money on the devices, which generally sell for $18,000 — far less than ventilators used in hospital intensive care units that can cost $50,000. Johnson says GM has no intention of making a profit.

Ventec will need government money to help pay parts suppliers and ramp up its own production from 200 per month to 1,000 or more, said CEO Chris Kiple.

Invoking the Defense Production Act “shined a light” on the need for ventilators, he said, but Ventec can’t move any quicker.

“We’re still moving full speed ahead,” Kiple said. “We know there’s a shortage of ventilators.”

————

This story has been corrected to show that that GM intends to start production in mid-April but will not reach a rate of 10,000 per month until later.

Talk to us

More in Herald Business Journal

James Berntson shows how his farm uses a trellis system to control tomato plants on Tuesday, June 21, 2022, at Radicle Roots Farm in Snohomish, Washington. (Ryan Berry / The Herald)
Backyard business: Snohomish farm thrives on less than one acre.

James Berntson grew Radicle Roots Farm using smart crop planning and organic practices.

A group gathers near a blending pit, which is where cow waste and other biodegradable material begins its journey towards becoming energy in a digester Friday, June 17, 2022, in Monroe, Washington. (Ryan Berry / The Herald)
Cow pie power! Monroe manure-to-energy project expands

Qualco has been turning cow poop into electricity since 2008. A new generator could turn on by mid-August.

Fauxy Furr in Arlington, Washington upcycles boots with custom trimmings. Their boots proved popular with customers from overseas. Photographed on February 8, 2022.  (Kevin Clark / The Herald)
‘Accidental exporters’ can tap into federal and state funds

The SBA offers funds and expertise to small companies that hope to boost their export business.

Trays of plants grow inside one of Infarm's vertical farms. Photo credit: Infarm
Growing up: Indoor warehouse farms make inroads in Snohomish County

Vertical farms that use LED lights to grow fresh herbs and salad greens indoors are sprouting up.

Everett
Port of Everett hosting annual open house after pandemic hiatus

Also, Rustic Cork Wine Bar plans to open a second shop at Fisherman’s Harbor — the latest addition to the port’s “wine walk.”

Holly Burkett-Pohland, the owner of Burkett’s Home & Gift, outside of her new store front on Friday, June 17, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
New Everett gift store debuts in former J. Matheson space

For years, Holly Burkett-Pohland wanted to expand a business founded by her mother in 1978.

Striking Starbucks employees talk to a woman who wanted to use the drive-thru but was turned away due to the strike on Wednesday, June 15, 2022, on Broadway in Everett, Washington. Workers at the 37th and Broadway store spent their morning picketing because a fellow employee had been fired the previous day in what the workers believe is an act of union busting. (Ryan Berry / The Herald)
Everett Starbucks workers go on strike after employee fired

The employee and her fellow union members claim she was fired for supporting the union. Starbucks denies it.

X
Property values soar 32% in Snohomish County due to hot housing market

Assessed values are up all across the county since last year. The impact on tax bills won’t be known for a few months.

A Kenmore Air Cessna 208 Caravan. (Kenmore Air) 20220613
Kenmore Air to start daily flights from Paine Field to San Juans

Service begins July 14. Flights to Friday Harbor and Orcas Island airports take about 25 minutes.

Seattle Space Needle sues coffee chain over use of logo

The logo for Local Coffee Spot features a mug of hot coffee whose rising steam bears striking resemblance to the iconic tower.

Logo for news use, for stories regarding Washington state government — Olympia, the Legislature and state agencies. No caption necessary. 20220331
Foes of state’s capital gains tax drop plans for initiative

I-1929 sponsors say they are confident a lawsuit challenging the legality of the tax will be successful.

Arlington
Smoother sailing: Arlington airport gets grant to fix runway

A $2.3 million federal grant will pave the way for a project to resurface the airfield’s main runway.