FILE PHOTO: The GM logo is seen at the General Motors plant in Sao Jose dos Campos, Brazil, January 22, 2019. REUTERS/Roosevelt Cassio
(Reuters) – The United States on Wednesday awarded automaker General Motors Co (GM.N) a contract worth $489.4 million to make ventilators needed to treat severely sick coronavirus patients.
The Department of Health and Human Services contract is the first for ventilator production under the Defense Production Act, invoked by President Donald Trump to get companies to produce essential gear needed to fight the pandemic.
GM will work with ventilator firm Ventec Life Systems to deliver 30,000 ventilators under the contract to the U.S. government by the end of August, with deliveries of the first 6,132 ventilators taking place by June 1.
The company “will fulfill the government contract and (has) the capacity to supply more if needed,” GM spokesman Jim Cain said, adding that the contract also includes “consumables and accessories (hoses, stands, etc.) to support each unit.”
GM Vice President Gerald Johnson told Reuters last month the automaker is spending tens of millions on retooling costs as it produces the ventilators, and that if supplier retooling costs are factored in, total retooling costs were in the hundreds of millions of dollars.
Last week, smaller rival Ford Motor Co (F.N) also said it will produce 50,000 ventilators over the next 100 days at a plant in Michigan in cooperation with General Electric Co’s (GE.N) healthcare unit.
Reporting by Ankit Ajmera in Bengaluru and David Shepardson in Washington; Editing by Saumyadeb Chakrabarty