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Feds will pay GM $489 million to make 30,000 ventilators by August

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Coronavirus — GM is scheduled to deliver 6,000 ventilators by May, another 24,000 by August. Timothy B. Lee – Apr 8, 2020 8:35 pm UTC The Trump administration will pay General Motors $489 million to manufacture 30,000 ventilators, the Department of Health and Human Services announced on Wednesday. GM, of course, is a car company,…

Coronavirus —

GM is scheduled to deliver 6,000 ventilators by May, another 24,000 by August.


Old woman with Ventilator mask on Hospital bed

The Trump administration will pay General Motors $489 million to manufacture 30,000 ventilators, the Department of Health and Human Services announced on Wednesday.

GM, of course, is a car company, not a supplier of medical equipment. Rather than designing a ventilator from scratch, GM will be using a design borrowed from Ventec Life Systems. GM and Ventec announced a partnership to work on ventilators more than two weeks ago.

“GM is proud to deploy its purchasing and manufacturing capability alongside the respiratory care expertise of Ventec,” GM said in a press statement.

GM didn’t have much choice. Two weeks ago, Trump invoked the Defense Production Act and ordered GM to begin producing ventilators, claiming that GM was “wasting time” during voluntary contract negotiations. The government also says that the use of the DPA will help GM “get the supplies they need to produce ventilators as quickly as possible.”

GM is scheduled to deliver 6,132 of the ventilators by the end of May, with the rest being delivered in June, July, and August. An important question is whether these ventilators will arrive by the peak of US COVID-19 cases—and hence the period of highest need. No one knows for sure when this will happen, and projections vary. One popular model predicts that hospital utilization will peak in April and be declining rapidly by the end of May. Another online model predicts that utilization in some states won’t peak until June.

So there’s some risk that GM will deliver most of its ventilators only after the crisis in hospitals has passed. But that seems like a risk worth taking. An extra 30,000 ventilators will provide insurance against the possibility that things go worse than expected. It wouldn’t hurt to have 30,000 extra ventilators on hand in case we suffer a recurrence of COVID-19 in the coming months or another pandemic in the coming years.

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