GM, Ventec Blindsided by Trump Attacks on Ventilators

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A ventilator and other hospital equipment is seen in an emergency field hospital to aid in the COVID-19 pandemic in Central Park on March 30, 2020 in New York City. The field hospital is the work of the Samaritan's Purse organization and will add 68 hospital beds specifically equipped to serve as a respiratory care unit and to be administered by Mt. Sinai Hospital in Manhattan. (Photo by Stephanie Keith/Getty Images)
March 30, 2020
For 10 days this month, workers and executives at General Motors and the ventilator-maker Ventec Life Systems worked around the clock and through a weekend to figure out how assembly lines that make millions of cars and trucks a year could be retooled to churn out tens of thousands of medical-grade ventilators.
GM executives flew from Detroit to Seattle to see Ventec's operations firsthand. GM engineers began puzzling over how to make a product the company had never built before — and not at Ventec's steady pace of roughly 250 a month but a furious 10,000 a month or more to meet the soaring demand of critically ill coronavirus patients.
And at a GM electronics plant in Kokomo, Ind., workers began relocating office and assembly equipment to prepare for an entirely new production line.
All the while, Ventec was talking with federal officials, talking through how many ventilators they could provide and which types. 
Then the president took to Twitter and unleashed a furious series of attacks at GM and its chairman and CEO, Mary Barra — notably the only woman to helm a U.S. automaker.
Company executives, officials inside the White House, and employees at a nonprofit who had helped broker the partnership between GM and Ventec were flabbergasted.
"The notion of GM dragging their feet is completely asinine. It's completely ridiculous. There is absolutely no truth to it at all," said a person directly familiar with the partnership, asking not to be named to protect sensitive ongoing negotiations between Ventec and the federal government. "We were shocked. We were completely shocked."
Neither GM nor Ventec received any warning about the president's ire from either the White House or any federal agencies. Less than 12 hours earlier, Trump had told Fox News' Sean Hannity that he'd felt, despite mountains of evidence otherwise, that concerns about the severe shortage of ventilators were overblown. 
Then the New York Times reported late Thursday that the president had reneged on a deal to buy about 80,000 of the ventilators for $1.5 billion — about $18,000 per device — and the torrent of attacks was unleashed.
It culminated in an announcement late Friday afternoon that Trump would invoke the Defense Production Act to compel GM and Ventec to make ventilators. Hours earlier, GM and Ventec had already announced that they were pushing ahead in their plans to produce as many as 200,000 ventilators.
"He was compelled to 'order' GM to do what it 'should have been doing' — which it was already doing," the person familiar with the partnership said. "If it goes wrong he can blame us. And when we start shipping next month — because we're going to do it and we're going to do it better than even we think we can — he can take credit for it."
Accounts differ as to whether Trump truly backed out of an agreement to buy ventilators, which are in desperately short supply at hospitals across the country. However, there is broad agreement that conversations are ongoing for the federal government to buy ventilators — and, perhaps more importantly, GM and Ventec are plunging ahead with their plan to start building them as soon as April.
"GM and Ventec continue to move forward in their partnership to make ventilators, and the DPA highlights that partnership and the federal government's focus on this issue," Ventec chief strategy officer Chris Brooks told Cheddar.
The remarkable string of invective unleashed by the president — though apparently sparked by the Times story — appears to have been fueled by a fundamental misunderstanding by Trump of Ventec's proposal. Although Trump in a tweet claimed that GM "said they were going to give us 40,000 much-needed Ventilators, 'very quickly'" and "now they are saying it will only be 6,000," people familiar with the negotiations say that those numbers corresponded to different proposals — different configurations at different volumes at different paces of production. 
The process began last week when Ventec – responding to a federal request-for-information – submitted its proposals to the government for ramping up ventilator production. The plans included a range of options, depending on the speed of production and the type of ventilator. Generally ventilators cost between $12,000 and $20,000 each, with different prices depending on how they were configured – such as for a hospital ICU or for at-home use – and the speed of production. 
People familiar with the negotiations say that the total estimated price was between $1 billion and $1.5 billion — less than 1 percent of the $2 trillion in the relief package the president signed Friday. 
Then the discussions hit a snag: Federal officials realized that Congress had not allocated enough money to buy the ventilators. As federal officials scrambled to find a solution, and with conversations temporarily paused, the Times published its report – setting off a media frenzy and the series of angry attacks by Trump.
News reports have chronicled layers of chaos and lack of preparedness within the federal bureaucracy — much of it emanating from the White House and Trump's back-and-forth on the severity of the health crisis, which he once referred to as a hoax
However, adding to the challenge, clearing the way for ventilator production has required federal officials at a range of agencies to rapidly get up to speed on the intricacies of medical devices, to the ins and outs of large-scale manufacturing, the byzantine world of congressional budgeting, and the precise meaning of a Cold War-era law once meant for wartime but now being used to respond to a pandemic.
Industry experts and legal scholars are still working to understand the implications of Trump having invoked the Defense Production Act. 
Insiders directly familiar with Ventec's negotiations with federal officials say that they generally welcome Trump's decision to invoke the act. The measure provides access to crucial funding and clears certain regulatory hurdles — making it easier, for example, for a factory that makes consumer electronics to begin building medical-grade equipment.
However, there is also skepticism — stoked in large measure by the apparent vindictive tone of Trump's announcement Friday, which singled out only GM, leaving unmentioned other automakers like Ford and Tesla that are also planning to make ventilators. Its exclusive focus on GM was reinforced in a subsequent White House memo Friday directing the secretary of the Department of Health and Human Services to "require General Motors Company to accept, perform, and prioritize contracts or orders for the number of ventilators that the Secretary determines to be appropriate."
"The president's back-and-forth with General Motors raises the question of how much this was a use of an authority to save lives versus this was something of a retaliation against a company he seems to find frustrating, especially when the company says that the thing they were ordered to do they were already doing voluntarily," said Joshua Geltzer, executive director of the Institute for Constitutional Advocacy and Protection at Georgetown Law.
Insiders and experts have expressed deep concern that the president's attacks will make executives think twice before volunteering their companies to help with the coronavirus response. And there is the worry that the back-and-forth has only added to the confusion around an otherwise obscure law.
"If there's confusion among people who actually understand the Defense Production Act, then there's lots of confusion among states and local governments about what's happening and what's not happening," said Kelly Magsamen, a former National Security Council official in the Bush and Obama administrations, and vice president for national security and international policy at the Center for American Progress. "The administration needs to be as clear and transparent as possible about what the process is."
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