Trump invokes Defense Production Act

Trump's decision followed a series of tweets critical of General Motors’ pace of producing ventilators to address COVID-19 pandemic

President Donald Trump at the American Center for Mobility in Ypsilanti, Mich., with General Motors CEO Mary Barra in 2017.  (Nicholas Kamm/AFP via Getty Images)
President Donald Trump at the American Center for Mobility in Ypsilanti, Mich., with General Motors CEO Mary Barra in 2017. (Nicholas Kamm/AFP via Getty Images)
Posted March 27, 2020 at 3:46pm

President Donald Trump on Friday formally invoked the Defense Production Act in order to force General Motors to produce ventilators.

The company on March 20 announced an agreement with Ventec Life Systems to produce ventilators, but Trump made it clear in two separate tweets Friday that he was dissatisfied with the speed, and The New York Times reported Thursday that the administration was concerned about a $1 billion price tag that the company had attached to the ventilators.

The order directs the secretary of Health and Human Services to "use any and all authority" to require GM to "accept, perform and prioritize Federal contracts for ventilators." In a statement, Trump said negotiations "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. GM was wasting time."

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n the signing ceremony for the $2 trillion stimulus bill Friday, Trump said he invoked the Defense Production Act because GM had promised 40,000 ventilators and “all of the sudden it came down to 6,000, then they talked about a higher price than we were discussing.”

GM said in a statement that it is "proud to support" the initiative with Ventec.

"Ventec, GM and our supply base have been working around the clock for over a week to meet this urgent need," the company said in the statement. "Our commitment to build Ventec’s high-quality critical care ventilator, VOCSN, has never wavered."

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!!!!!!" he tweeted, referring to a GM plant in northeast Ohio that the company sold to an electric truck manufacturer in 2019.

Trump also lambasted the company in a second tweet in which he said GM was falling short of its promises to deliver.

"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," Trump tweeted, referring to GM CEO Mary Barra.

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The tweets came after The New York Times reported Thursday that the Trump administration had balked at the $1 billion price tag to build as many as 80,000 ventilators to respond to the coronavirus pandemic. And they came hours after Trump, speaking on Fox News, suggested that the demand for ventilators was overblown.

“I don't believe you need 40,000 or 30,000 ventilators,” he said. “You know, you're going to major hospitals sometimes, they'll have two ventilators. And now, all of a sudden, they're saying, can we order 30,000 ventilators?”

Defense Production Act

Trump also suggested that invoking the Defense Production Act was unnecessary because the companies had offered to help.

Within hours of Trump’s tweets Friday, GM posted a news release on its website announcing it would go ahead building the ventilators at GM’s Kokomo, Indiana, manufacturing plant, with the ventilators scheduled to ship “as soon as next month.” Ventec, too, is taking “aggressive steps" to increase production at its Bothell, Washington, plant.

Trump last week said he would invoke the Defense Production Act, which allows him to force companies to buy or build critical supplies during national crises, but he has not actually used it. Instead, GM, Ford and Fiat-Chrysler have voluntarily announced plans to move forward with plans to make face masks, respirators and ventilators.

GM, for example, is also temporarily converting its Warren, Michigan, plant to build Level 1 surgical masks. Production will begin next week and ramp up to 50,000 masks per day within two weeks, with the potential of increasing to 100,000 per day, according to the company.

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GM, like Ford and Fiat-Chrysler, has temporarily halted auto production during the crisis. But all three have vowed to help during the pandemic. Fiat Chrysler Automobiles NV is using a plant in China to make face masks for first-responders and health care workers in North America, with the goal of producing 1 million masks per month in the coming weeks, which they'll donate to police, EMTs, firefighters and health care workers in hospitals and clinics.

In a news release, the company said it was "the first of a multifaceted global program" aimed at supporting the fight against the coronavirus.

Ford, meanwhile, has partnered with two medical equipment manufacturers, 3M Co. and GE Healthcare, to scale up production of their respirators and ventilators.

With GE, Ford will scale up the production of ventilators, with Ford providing technical and production expertise to help GE simplify the design of its ventilators. And with 3M, the company has plans to build a backpack-style respirator for health care workers.

Jim Hackett, Ford’s president and CEO, said the company had encouraged its engineers and designers “to be scrappy and creative to quickly help scale up their production of this vital equipment.” The company is reportedly exploring the idea of using the fan used to cool seats in its F-150 pickups in the filtration system in a design for a respirator.

The company is also assembling face shields at one of its manufacturing sites and using 3D printers at its Advanced Manufacturing Center in Redford Township, Michigan, to produce disposable respirators and reacquiring 165,000 N95 respirators it sent to China earlier in the year.

Toyota on Friday announced plans to produce 3D-printed face shields, with mass production starting next week. The automaker also said it is finalizing agreements to begin working with at least two companies that produce ventilators and respirators to help increase their capacity and is offering manufacturing and engineering know-how to help companies increase their capacity for medical supplies and equipment.

'Arsenal of Health'

Automakers have a history of helping in crisis; the Big Three made tanks, trucks and parts of bombers for the military during World War II. That effort was nicknamed the Arsenal of Democracy.

This movement has a nickname too: The Arsenal of Health. Jessica Caldwell, executive director of insights for Edmunds Automotive, said auto manufacturers have expertise in logistics, engineering and mass manufacturing.

“The design and engineering resources of these companies are really deep,” she said. “And when you think of all the different components they make, like HVAC systems and electrical components and electronics, if they have that experience, they can probably dabble in just about anything.”

Carla Bailo, president and CEO of the Center for Automotive Research, said work between auto manufacturers, the supply base and medical companies is ongoing.

Rather than changing full assembly lines, which can take months, they’re creating smaller-scale assembly lines.
Even without a government order to build, she said, “it’s a win-win for the auto industry. If they can work to improve health, mitigate the spread of disease and hence get the economic engine going for their company and country, it’s socially the right thing to do, but it will also in the long run benefit the companies themselves.”

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