GM initially volunteered to build the ventilators before President Trump invoked the Defense Production Act.
The US government and General Motors have a deal. The largest US automaker will build 30,000 ventilators with help from its partner Ventec Life Systems. The Trump administration will buy the machines, which help patients breathe, for $490 million.
The Department of Health and Human Services said on Wednesday both parties agreed to terms after President Trump invoked the Defense Production Act. GM had previously volunteered to build the machines with Ventec ahead of the DPA.
The presidential power, typically used during times of war, gives the president the authority to direct private companies to build essential equipment to support federal efforts. With a shortage of ventilators projected for those infected with the coronavirus, governments from the local, state and federal levels scrambled to round up a supply of the life-saving machines.
GM and Ventec "are working with speed and urgency to arm frontline medical professionals with the critical care ventilators they need to treat seriously ill patients," a GM spokesperson said in a statement, adding the automaker is "proud to deploy its purchasing and manufacturing capability alongside the respiratory care expertise of Ventec."
The automaker quickly morphed its partnership with Ventec throughout March from lending supply chain, purchasing and manufacturing expertise to a commitment to build ventilators at its own production plants. On March 27, GM declared its plant in Kokomo, Indiana, was already in the process of retooling to build the machines. If needed, the automaker said it could produce more than 10,000 ventilators a month as production ramps up.
GM also voluntarily began production of masks for health care workers at a previously closed transmission plant in Michigan last month.
The first batch of ventilators will number 6,132 machines and be ready for the federal government by June 1. By August, the government said it will have 30,000 of the machines in its federal stockpile.