Health and Science

GE, Ford sign $336 million federal contract to make ventilators for coronavirus outbreak

Key Points
  • General Electric and Ford will produce 50,000 ventilators for the U.S. government under the Defense Production Act for $336 million.
  • The companies are expected to produce the life-saving devices at a facility in Michigan beginning next week.
  • According to the terms in the announcement, each ventilator would cost $6,720.
Ford, in collaboration with GE Healthcare, will leverage the design of Airon Corp.'s FDA-cleared ventilator to produce in Michigan.
Ford

General Electric and Ford Motor will produce 50,000 ventilators for the U.S. government under the Defense Production Act for $336 million, federal officials announced Thursday.

Production of the ventilators is expected to begin next week at a Ford facility in Michigan. The companies are expected to produce all the ventilators by July 13, according to the Department of Health and Human Services.

According to the terms in the announcement, each ventilator would cost $6,720. That's nearly $10,000 below a previous federal contract for 30,000 ventilators at $489.4 million, or about $16,300 per unit, with General Motors and Washington-based Ventec Life Systems.

Ventilators have a wide-range of pricing from thousands of dollars to tens of thousands. The GM-Ventec one is a more advanced critical care ventilator that delivers precise air. It has different settings to help improve blood-oxygen levels in someone suffering from acute respiratory distress syndrome and wean them off the ventilator.

The federal contract is the second for GE Healthcare regarding ventilator production. Earlier in the week, a deal was announced for 2,410 ventilators for $64.1 million, or about $26,600 per unit.

A Ford spokesman said production of the ventilators will be done at-cost. GM also said it would not be profiting from its ventilator production.

Tom Westrick, vice president and chief quality officer of GE Healthcare, previously said the more "basic" ventilators are "well-suited to address the urgent needs during the Covid crisis."

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GM announces deal with Ventec on ventilators

Ford, in an emailed statement, said it appreciates "the federal government's action and will continue to work closely with the administration to meet the immediate needs of coronavirus patients."

The ventilator Ford and GE are producing is being licensed from Florida-based Airon Corp., a small, privately held company specializing in high-tech pneumatic life support products. The devices operate on air pressure without the need for electricity.

The federal contract is the second for GE Healthcare regarding ventilator production. Earlier in the week, a deal was announced for 2,410 ventilators for $64.1 million.

A GE spokeswoman, in an emailed statement, said the company is "pleased to support the U.S. government and help meet the unprecedented demand for this life-saving medical equipment."

The Department of Health and Human Services said it has finalized contracts to produce or acquire more than 41,000 ventilators by the end of May, and over 187,000 ventilators by the end of the year.

"These companies and their incredibly dedicated workers will ensure that our country can provide our hospitals and healthcare providers with the ventilators needed to sustain and save lives during this pandemic," Secretary of Health and Human Services Alex Azar said in a release.

Shares of Ford were down 1.6% during trading Thursday afternoon to $4.94, while shares of GE were down 3.2% to $6.30.