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April 8, 2020 10:00 AM, EDT

GM Secures $490 Million US Contract to Make Ventilators

The GM Flint Assembly plant stands idle in Flint, Mich., on March 23.The GM Flint Assembly plant stands idle in Flint, Mich., on March 23. (Anthony Lanzilote/Bloomberg News)

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The U.S awarded General Motors Co. and its partner Ventec Life Systems a $489.4 million contract to make 30,000 ventilators by the end of August, finalizing a deal that briefly was a point of contention for President Donald Trump.

Production will start next week, according to a GM spokesman, and the carmaker and Ventec will deliver a fifth of the breathing machines they’re building for the Health and Human Services Department by June 1. The U.S. invoked the Defense Production Act to secure production from the companies after Trump accused GM of moving slowly and gouging the government. He has praised the carmaker since then.

GM has been working with Bothell, Wash.-based Ventec to boost the company’s production of ventilators used to help COVID-19 patients breathe while being treated for the respiratory disease. The automaker has converted an auto-parts plant in Kokomo, Ind., to make the devices with paid volunteers from the United Auto Workers union.

GM and Ventec had been working around the clock to find a way to build ventilators in mid-March when Trump accused the carmaker of dragging its feet and criticized CEO Mary Barra. GM is now the first company with a U.S. contract to add to the national stockpile that the federal government maintains, which is expected to run short of medical equipment to dole out to states coping with the coronavirus pandemic.

Before working with GM, Ventec was making at most 250 ventilators a month. To boost production rates into the thousands, Ventec needed GM’s help enlisting hundreds of parts suppliers and pulling together the 1,000 workers who will build the ventilators at the plant in Indiana.

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