Trump invokes federal law to compel GM to make ventilators


President Donald Trump triggered the federal government’s wartime powers to compel General Motors to make ventilators needed to treat coronavirus patients, lashing out at the automaker for failing to act more quickly to produce the critical medical equipment.

Mr Trump said he moved to invoke the 1950s-era Defense Production Act, which gives the president power to force manufacturers to make needed equipment in national emergencies, after negotiations between Washington and GM broke down over the cost of the ventilator order.

But the president also acknowledged his decision was motivated by longstanding anger at the company for shutting domestic manufacturing plants. “I wasn’t happy when GM built plants over the years, the build a lot of plants in other countries,” Mr Trump said. 

“Price became a big object,” he added. “We didn’t want to play games with them . . . We’re not looking to get ripped off on price.”

Mr Trump appointed hardline trade adviser Peter Navarro to the role of co-ordinator for the national defence production programme. “Peter Navarro is going to handle that,” Mr Trump said of the GM talks, “Maybe they’ll change their tune.”

James Cain, GM’s spokesperson, denied the company had been dragging its feet on producing ventilators, which have become the most needed piece of medical equipment in the pandemic since most victims die due to lung failure.

Mr Cain said GM had worked with the ventilator manufacturer Ventec “around the clock for over a week to meet this urgent need. Our commitment to build Ventec’s high-quality critical care ventilator . . . has never wavered.”

The move marked a reversal for Mr Trump, who had said previously that he did not need to use his DPA powers because companies were doing all they could to help produce such equipment. Democratic critics of the president had argued he should use his authority under the act.

READ  Sunak: 'jury is out' on how economy emerges from COVID crisis

“It is time for the president to stop whining and tweeting and start acting,” Connecticut Senator Chris Murphy told reporters on Friday, hours before the White House announcement. “The president complained today about GM’s apparent reversal on the number of ventilators they were going to produce. Well, it doesn’t have to be up to GM. The president of the United States has the power [to compel companies].”

Mr Trump had earlier criticised GM and Ford on Twitter for not manufacturing ventilators fast enough, calling on GM to bolster supplies by reopening a plant it sold last year.

“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,” the White House said in a statement. “GM was wasting time.” 

GM said earlier that it would join with Ventec to produce the medical equipment, including at its factory in Kokomo, Indiana. GM and Ventec would deliver the first ventilators next month with capacity to increase to 10,000 a month. GM will donate resources at cost.

GM, Ford and Fiat Chrysler have all rolled out plans to help make medical equipment or protective gear to combat the coronavirus pandemic.

The GM-Ventec venture had been scheduled to debut on Wednesday, but was delayed while government officials weighed whether the $1bn price tag was prohibitive, The New York Times reported.

READ  UK to unveil rescue package for start-ups - Telegraph

Mr Trump said on Twitter that GM was delivering fewer ventilators than promised while asking for “top dollar”.

The president said GM and Ford should “GET GOING ON VENTILATORS, FAST!!!!!!”. He also said GM should reopen the plant at Lordstown, Ohio, that it sold to a start-up planning to make electric trucks.

Industry groups led by the US Chamber of Commerce have argued against formal government intervention under the DPA, saying that manufacturers are rising to the challenge voluntarily.

The act gives the president the authority to demand that manufacturers give priority to government orders, to prevent hoarding and price gouging, and to provide incentives in the form of purchase guarantees and subsidies, noted Katrina Mulligan, a national security expert with the Center for American Progress Action Fund.

“The manufacturers are not the ones who should be making life and death decisions about who receives what, when,” she argued.

Yet the DPA does not grant limitless powers. A company must have an existing contract with the government for Washington to insist it receive priority treatment, said Michael Barnicle, chair of the government contracting practice at Duane Morris.

Ventec has bid on government contracts to supply ventilators, but it is unclear if they have been awarded a contract. GM announced a week ago that it would use its purchasing and logistics expertise to help Ventec, a smaller manufacturer headquartered in suburban Seattle, to increase production.

Ford is working with Minnesota manufacturer 3M and GE Healthcare on efforts to build a modified respirator and a modified ventilator, the latter of which would need fast-tracked approval from the federal government for production. Ford and the United Auto Workers union also plan to make about 100,000 face shields a month for hospital workers.

READ  Coronavirus' next casualty: The nation's biggest story could devastate news industry

Although GM has closed all its plants in North America, 1,000 UAW members will return to work to make the ventilators. The company also plans to make surgical masks at a Warren, Michigan, plant, reaching 50,000 a day in two weeks.

“We are proud to stand with other American companies and our skilled employees to meet the needs of this global pandemic,” said Mary Barra, chief executive.

GM shares closed 5.3 per cent lower on Friday, while Ford’s were down about 1 per cent.



READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here