General Motors will build 30,000 ventilators for the national stockpile for $489.4 million to assist in the coronavirus pandemic, federal officials announced Wednesday.
The Department of Health and Human Services said the contract is the first for ventilators under the Defense Production Act, which was invoked last month by President Donald Trump.
The Detroit automaker will produce and deliver the ventilators to the government by the end of August, with the first 6,132 ventilators being delivered by June 1, the agency said. Production is expected to begin next week, according to a GM spokesman.
The cost is about half the price previously reported by The New York Times for a contract to build up to 80,000 ventilators for $1 billion. GM confirmed Wednesday that it is not profiting from the contract.
Shares of GM were up 1.8% during premarket trading. The stock is down 41.8% this year.
According to the terms in the announcement, each ventilator would cost $16,000, well below the market price of as much as $50,000 price cited by New York Gov. Mario Cuomo at a March 30 news conference.
GM, in a statement, said it remains "dedicated to working with the administration to ensure American innovation and manufacturing meet the needs of the country during this global pandemic."
Trump ordered GM to produce the devices under the Defense Production Act on March 27, hours after the automaker announced a partnership with Washington-based Ventec Life Systems to build critical-care ventilators at one of GM's components plants in Indiana.
"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. Invoke 'P'."