Trump uses Defense Production Act to require GM to make ventilators

President Trump on Friday used the Defense Production Act to compel General Motors to produce ventilators to combat the coronavirus after days of hesitating to use the powers in the law.

The president in a statement said the federal government had abandoned negotiations with the automaker on ventilator production, complaining that the automaker was “wasting time.”

“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,” Trump said.

“GM was wasting time,” the president asserted. “Today’s action will help ensure the quick production of ventilators that will save American lives.”

The Trump administration had been negotiating with GM to make tens of thousands of ventilators, but talks broke down due to concerns that the price tag would exceed $1 billion. 

The president turned his ire on the automaker earlier Friday, singling out CEO Mary Barra for criticism.

“As usual with ‘this’ General Motors, things just never seem to work out,” Trump tweeted. “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 in a separate tweet called on GM to reopen a Lordstown, Ohio, plant that the company shuttered last year and sold in November.

The use of the Defense Production Act gives Health and Human Services Secretary Alex Azar authority to determine how many ventilators are appropriate. The department has not responded to requests for comment about whether it has taken an inventory of the devices.

It was not immediately clear how quickly GM would be able to scale up ventilator production. The company said in a news release earlier Friday that it was partnering with medical device maker Ventec to convert an Indiana GM facility into a ventilator production plant.

The companies said they expected the first ventilators will be available next month with the ability to produce more than 10,000 per month after that.

At a White House briefing on Friday evening, Trump said the use of the DPA “should demonstrate clearly to all that we will not hesitate to use the full authority of the government to combat this crisis.”

Trump went on to name trade adviser Peter Navarro as the national policy coordinator for the DPA going forward. The promotion of Navarro, one of the most hardline trade protectionists in the administration, signals Trump may be looking to use the act more broadly moving forward.

Navarro told reporters that the administration is working with Ford and General Electric (GE) on ventilator production, but ran into “roadblocks” with GM that prompted the use of the DPA.

State leaders have warned they are running dangerously low on the breathing machines as hospital capacity fills up in areas dealing with significant outbreaks. New York Gov. Andrew Cuomo (D) has projected the state will need 30,000 ventilators, while Louisiana Gov. John Bel Edwards (D) has indicated the state will run out in early April.

Democrats largely expressed relief that Trump had finally engaged the DPA after days of holding out.

“We desperately needed the Defense Production Act invoked to ensure the production of life-saving ventilators. We are relieved that just happened. Lives depend on it,” Cuomo tweeted.

Democratic presidential candidate Joe Biden said during a virtual roundtable event that Trump’s order was “good news.”

“We were suggesting he do that over a month ago,” Biden said. “But the point is he’s done it, and I congratulate him for it.”

Trump invoked the act last week, which gives the president extraordinary powers to compel private companies to manufacture critical supplies in times of crisis. But he had yet to actually use it to ramp up production of masks, ventilators and other materials that hospitals and state leaders have said are dangerously scarce.

The president and his aides had insisted in recent days that the DPA effectively provided leverage and that private companies were producing sufficient supplies. Trump earlier this week also expressed a reluctance to use the act because he worried that doing so amounted to “nationalizing” industries.

Trump on Thursday night questioned some of the requests for ventilators coming from state leaders.

“I have a feeling that a lot of the numbers that are being said in some areas are just bigger than they’re going to be,” Trump said on Fox News.

“I don’t believe you need 40,000 or 30,000 ventilators,” he added. “You know, you go into major hospitals, sometimes they’ll have two ventilators. And now all of a sudden they’re saying, ‘Can we order 30,000 ventilators?'”

But as the number of coronavirus cases in the U.S. has risen, the need has become more dire. The U.S. has more cases than any other nation with more than 97,000. Roughly 1,500 Americans had died from the virus as of late Friday afternoon.

Updated: 6:17 p.m.