March 27, 2020 6:15 PM, EDT

Trump Invokes Production Law, Ordering GM to Build Ventilators

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

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President Donald Trump on March 27 ordered General Motors Co. to make ventilators for coronavirus patients, invoking a federal law that gives him vast powers over industry in crises and acting as the company is within weeks of starting production on the equipment.

Trump said in a statement that he signed a memorandum “directing the Secretary of Health and Human Services to use any and all authority available under the Defense Production Act to require General Motors to accept, perform, and prioritize federal contracts for ventilators.”

GM has already been moving to manufacture ventilators at some of its factories in partnership with Ventec Life Systems Inc.

The president issued an executive order last week laying groundwork for him to invoke the law, but since then he has expressed reluctance to use the powers. He has repeatedly said manufacturers had volunteered to produce coronavirus materials.

But on March 27, his patience appeared to run out with GM. He assailed the company and its chief executive officer, Mary Barra, in a series of tweets in which he accused the firm of moving slowly and demanding too high a price for its ventilators.

It wasn’t clear what prompted the tweets, which took the company by surprise, according to people familiar with the matter.

GM sold the former Chevrolet Cruze plant in November to Lordstown Motors Corp., which is backed by electric pickup-truck startup Workhorse.

“Our negotiations with GM regarding its ability to supply ventilators have been productive, but our fight against the virus is too urgent to allow the give-and-take of the contracting process to continue to run its normal course,” Trump said in the statement. “GM was wasting time.”

Just hours before his tweets, Trump said in an interview on Fox News that companies — including GM — were responding appropriately to the coronavirus outbreak.

A little more than an hour after Trump’s first tweet, GM and Ventec announced they would build ventilators at the automaker’s parts plant in Kokomo, Ind., where they’ve been working around-the-clock for a week to convert into a medical-device facility.

Democrats, including Vice President Joe Biden, Trump’s likely opponent in the November election, had urged Trump to invoke the DPA earlier. Many U.S. governors have complained they’re unable to obtain sufficient supplies of ventilators, respirator masks and even basic medical supplies like gloves and gowns.

“That’s really good news,” Biden said after Trump’s statement. “Now, we were suggesting to do that over a month ago. But the point is, he’s done it, and I congratulate him for it.”

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