The federal government will pay General Motors about the price of a Chevrolet Spark for each of the 30,000 hospital ventilators the automaker plans to build — largely by hand, in an Indiana plant designed to make auto parts — over the next four months to help treat patients infected with COVID-19.
The Trump administration last week announced a $490 million contract with GM to deliver 30,000 ventilators — more than double the number now in the Strategic National Stockpile — by August. The per-unit cost of about $16,000 is a fraction of the $45,000 that New York Gov. Andrew Cuomo said ventilator prices had surged to by the end of March as states competed for critical medical equipment.
For that price, GM and partner Ventec Life Systems not only have to build the ventilators, they also need to make 10 weeks' worth of consumable parts for each one, hire and train temporary workers and convert GM's Kokomo, Ind., plant for the project. "We aren't doing this for a profit," GM spokesman Dan Flores said.
GM plans to start mass production of the ventilators this week and says it's ahead of a schedule that calls for shipping the first 6,000 by June 1. Last week, workers were validating equipment in the plant. Because of the urgency in providing the ventilators to hospitals, there is limited time to automate the manufacturing process, so the ventilators will be mostly hand-built, Flores said.
After fulfilling the government's order, which came nearly two weeks after President Donald Trump invoked the Defense Production Act to order GM to help, GM says it has the infrastructure to further scale production. The automaker had begun planning to build ventilators before Trump's order.
The coronavirus pandemic is "so unprecedented. Most people have an understanding of the president wanting to initiate this act," said Mack McLarty, vice chairman of RML Automotive in Dallas and former chief of staff for President Bill Clinton. Automakers are "making a good faith effort to do their part and more."
A week before the government's involvement, GM partnered with Ventec to scale ventilator production, and three days later, GM sourced all the necessary parts from its supply base. Ventec and GM said they had the sourcing plans and parts needed to build up to 200,000 ventilators.
The ventilators, called the V+ Pro, are designed for critical care and can run on battery power, allowing health care workers to use them in nontraditional locations such as makeshift field hospitals.
The V+Pro does not provide some respiratory therapies of Ventec's more advanced VOCSN system, which sells for about $22,000, but GM can increase production of the V+ Pro ventilators more quickly. They are sophisticated enough to "help the worst of the worst COVID-19 patients," Flores said.
As of last week, about 200 GM employees were making the ventilators at the Kokomo plant. GM plans to hire at least 800 more temporary workers and has received more than 1,300 job applications, Flores said. GM also plans to make 1.5 million face masks per month in Warren, Mich.
"I have family all across the country, so [COVID-19] has impacted everybody that I know and love," Debbie Hollis, a member of UAW Local 292 in Kokomo who is building the ventilators, said in a statement. "I'm grateful that I get a chance to do my part."