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Bloomberg News/Landov GM has been ordered by President Trump to make more ventilators to help fight COVID-19 victims.
President Trump on Friday afternoon said he signed a memorandum requiring General Motors to make ventilators for hospitals to help treat patients suffering from the COVID-19 illness, invoking for the first time a 70-year-old law created during the Korean War that gives the government broad authority over private businesses.
The order directs the secretary of U.S. 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 GM, -5.23% had previously promised to shift some auto production over to ventilators, but the president on Friday morning accused the auto maker of falling short on its promise.
Trump has been criticized by some governors and Democrats in Congress for not using his authority earlier on. The White House was reluctant to force privately owned companies to comply, preferring to rely on negotiations and volunteer efforts.
In a statement, Trump said, “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. GM was wasting time. Today’s action will help ensure the quick production of ventilators that will save American lives.”
GM defended its efforts after the president’s earlier criticism, saying it was racing to produce more ventilators with the help of Ventec Life Systems. The company said it would be soon able to make tens of thousands of masks and ventilators a week.
“Ventec, GM and our supply base have been working around the clock for over weeks to meet this urgent need. Our commitment to build Ventec’s high-quality critical care ventilator, VOCSN, has never wavered,” the automaker said in a statement.
In after-hours trading, GM shares were unchanged.
