General Motors, Philips to supply 73,000 ventilators to U.S. in $1.1 billion effort

General Motors

The U.S. Health and Human Services Department (HHS) on Wednesday awarded two contracts worth over $1 billion to make ventilators required to treat severely sick coronavirus patients and prepares to declare five more contracts later this week.

HHS awarded automaker General Motors a contract for $489 million to produce 30,000 ventilators, while it also declared a $646.7 million contract given to Dutch technology company Philips to produce 43,000 ventilators by year end, including 2,500 ventilators by the end of May.

GM will collaborate with Ventec Life Systems to provide the 30,000 ventilators under the contract to the American government by the end of August, with deliveries of the first 6,132 machines by June 1. GM is set to start production in Indiana next week.

Last week, U.S. President Donald Trump released an order under the Defense Production Act to facilitate the supply of materials to produce ventilators to Philips, General Electric, Hill-Rom Holdings Inc, Medtronic Plc, ResMed and Vyaire Medical. HHS prepares to declare contracts with those firms later this week, the agency stated.

Trump said the order would assist the companies “overcome obstacles in the supply chain that threaten the rapid production of ventilators”.

GM will meet the government contract and (has) the capacity to supply more if required, the company’s spokesman Jim Cain said, adding the contract also consists of consumables and accessories (hoses, stands, etc.) to support each unit.

GM Vice President Gerald Johnson informed Reuters last month the automaker is spending tens of millions of dollars on retooling expenses as it produces the ventilators, and that if supplier retooling expenses are included, total retooling expenses were in the hundreds of millions of dollars.

About 457,035 people in the US have been confirmed as being infected with the coronavirus. The virus has killed 16,252 people in the country.

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