President Trump Invokes Defense Production Act To Force GM To Produce Ventilators

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by Tyler Durden
Friday, Mar 27, 2020 - 16:10

Update (1305ET): Just as he warned would happen, President trump has officially invoked The Defense Production Act to force General Motors to produce ventilators.

Statement from the President Regarding the Defense Production Act

Today, I signed a Presidential 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.

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.

Full Order below:

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Defense Production Act of 1950, as amended (50 U.S.C. 4501 et seq.) (the "Act"), it is hereby ordered as follows:

Section 1. Policy. On March 13, 2020, I declared a national emergency recognizing the threat that the novel (new) coronavirus known as SARS-CoV-2 poses to our national security. In recognizing the public health risk, I noted that on March 11, 2020, the World Health Organization announced that the outbreak of COVID-19 (the disease caused by SARS-CoV-2) can be characterized as a pandemic. I also noted that while the Federal Government, along with State and local governments, have taken preventive and proactive measures to slow the spread of the virus and to treat those affected, the spread of COVID-19 within our Nation's communities threatens to strain our Nation's healthcare system. I further noted that, to ensure that our healthcare system is able to surge capacity and capability to respond to the spread of COVID-19, it is critical that all health and medical resources needed to respond to the spread of COVID-19 are properly distributed to the Nation's healthcare system and others that need them most at this time. Accordingly, I found that that health and medical resources needed to respond to the spread of COVID-19, including personal protective equipment and ventilators, meet the criteria specified in section 101(b) of the Act (50 U.S.C. 4511(b)).

Sec. 2. Presidential Direction to the Secretary of Health and Human Services (Secretary). The Secretary shall use any and all authority available under the Act to require General Motors Company to accept, perform, and prioritize contracts or orders for the number of ventilators that the Secretary determines to be appropriate.

Sec. 3. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

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Update (1135ET): It looks like Trump just placed a big Amazon order. Unfortunately, those "ventilators" probably don't qualify for prime shipping.

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Apparently, President Trump's plan to invoke his extensive authority to direct economic production, and then refuse to use it because companies are allegedly scrambling to "do the right thing" (or at least say the right thing) isn't working out as well as he had hoped.

Trump tweeted Friday that General Motors had revised guidance on masks it had planned to deliver to the government, delaying the delivery date and lowering the order total. And, Trump claimed, the company is charging "top dollar", as Trump put it.

He slammed CEO Mary Barra "Mary 'B'" and threatened to "invoke 'P'" - which we suspect means the Defense Production Act Authority. As most of his Democratic opponents have already pushed him to invoke the power - and Trump has refused repeatedly and in turn retaliated by claiming his critics were just trying to score cheap political points at the expense of America's always-dependable and infallibly civic-minded corporations. And during a crisis, no less.

Now Trump is slamming General Motors and Ford and demanding that they do the right thing  and ramp up production immediately - before he forces them to. Or he could just end it now and order them to pick up the slack.

It looks like Trump is already setting up these very same companies to take the fall when more states run into situations like New York, which doesn't have enough ventilators (some counties in Michigan have adopted a protocol that calls for not even using ventilators on the patients with the lowest odds of survival).