White House Cancels GM Joint Venture to Mass Produce Ventilators Over Fears Its Price Tag Could Exceed $1 Billion—or 0.05% of Latest Stimulus Bill
The White House abruptly cancelled a General Motors joint venture project to build tens of thousands of desperately-needed ventilators after FEMA officials expressed concern that the costs of the effort could exceed $1 billion — or roughly 0.05 percent of the massive coronavirus stimulus bill that passed the Senate the day before.
According to the New York Times, the project between the car manufacturer and Ventec Life Systems would’ve repurposed GM’s Kokomo, Indiana auto parts plant to produce up to 80,000 ventilators instead. The plan was set to be revealed on Wednesday, but the day came and went with no word.
Ventilators have rapidly become a critical need in areas like New York City where hospitals are increasingly overwhelmed with a surge of serious COVID-19 cases necessitating intensive care.
“The decision to cancel the announcement, government officials say, came after the Federal Emergency Management Agency said it needed more time to assess whether the estimated cost was prohibitive. That price tag was more than $1 billion, with several hundred million dollars to be paid upfront to General Motors,” the Times reported.
Government officials reportedly worried that the latest projections for the venture’s quick-turn capacity of building 7,500 ventilators in the very near future fell short of the original estimate of 20,000. But the decision to abort this venture at the last minute comes amidst signals from President Donald Trump himself that complaints about ventilator shortages are being unnecessarily hyped by Democrats like New York Governor Andrew Cuomo.
“Longtime emergency managers at FEMA are working with military officials to sort through the competing offers and federal procurement rules while under pressure to give President Trump something to announce,” the story notes. While representatives from both GM and Ventec remained enthusiastic about starting the project as soon as possible, its status going forward was unclear.
“The only thing missing was clarity from the government about how many ventilators they needed — and who would be paid to build them,” the Times noted.
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