Autos

GM facility to continue building ventilators after completing $489.4 million government contract

Key Points
  • A former General Motors auto facility will continue building critical-care ventilators following the expected completion this month of a $489.4 million government contract.
  • GM will lease the building on its components campus in Kokomo, Indiana, to Ventec Life Systems.
  • The automaker partnered with the medical device company as the first wave of Covid-19 cases surged in the U.S. this spring.
General Motors employees reported to their first day of work March 31, 2020 at the GM manufacturing facility in Kokomo, Indiana, where GM and Ventec Life Systems are partnering to produce critical care ventilators in response to the COVID-19 pandemic.
GM

A former General Motors auto facility in Indiana will continue building critical-care ventilators following the expected completion of a $489.4 million government contract this month for 30,000 of the devices for the national stockpile.

GM will lease the building on its components campus in Kokomo, Indiana, to Ventec Life Systems, a company the automaker partnered with to build the ventilators as the first wave of Covid-19 cases surged in the U.S. this spring.

"The entire GM team stepped up and contributed for the greater good, but clearly our focus needs to be on automotive-related manufacturing," GM spokesman Dan Flores said Wednesday. "Ventec is the expert here. We're going to step back and they're going to assume responsibility once the contract is filled."

VIDEO1:1101:11
GM & Ventec Life Systems produce first ventilators in joint effort

The companies are on track to complete the government's contract for the ventilators by the end of the month, Flores said. The facility has built and delivered more than 20,000 of the devices thus far, according to officials. 

Ventilators have been critical in saving lives during the coronavirus pandemic. While their need has waned in recent months, the health-care industry is bracing for a second surge of Covid-19.

The companies declined to disclose terms of the lease or how long Ventec is expected to occupy the building.

General Motors Chairman and CEO Mary Barra (and Ventec Life Systems CEO Chris Kiple talk with a worker while touring the GM manufacturing facility in Kokomo, Indiana on April 14, 2020.
GM

The facility employs about 800 people, including about 70 full-time hourly GM employees who are expected to return to their previous place of employment or layoff. The remaining employees — a mix of Ventec and contract or temporary workers — are expected to continue building the ventilators for the Washington-based medical device company based upon demand.

"It has been a dynamic, fluid situation from day one," Chris Brooks, Ventec chief strategy officer, told CNBC regarding future employment. Additional details are expected to be announced as the companies conclude the government's contract, he said. 

The companies announced they would produce the ventilators on March 27 after President Donald Trump criticized the automaker and CEO Mary Barra for not moving quickly enough to produce life-saving ventilators and wanting "top dollar" for doing so.

Following the announcement, Trump ordered GM to build the devices under the Defense Production Act, a Korean War-era statute that can force certain American companies to produce materials that are in short supply in times of crisis.