Trump Administration Pulls Back From $1 Billion Coronavirus Ventilator Deal

WASHINGTON — The White House had been preparing on Wednesday to announce amid an escalating pandemic that a joint venture between General Motors and Ventec Life Systems would begin producing as many as 80,000 desperately needed ventilators when word suddenly came down that the announcement was off.

The decision to cancel the announcement, according to government officials, came after the Federal Emergency Management Agency said it needed more time to assess whether the estimated cost was prohibitive — more than $1 billion, with several hundred million dollars to be paid upfront to General Motors to retool the car parts plant in Kokomo, Ind., where the ventilators would be made with Ventec’s technology.

Government officials said the deal may still happen but that they are looking at a dozen or more other proposals. And they contend that an initial promise that the joint venture could turn out 20,000 ventilators in short order had shrunk to 7,500, with even that number in doubt. 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.

By early Thursday evening, at the president’s daily news briefing with his coronavirus task force, there was still nothing to announce, and the outcome of the deliberations remained unclear.

But a General Motors spokesman said that “Project V,’’ as the ventilator program is known, is moving very fast, and a company official said “there’s no issue with retooling.”

A Ventec representative agreed.

“Ventec and GM have been working at breakneck speed to leverage our collective expertise in ventilation and manufacturing to meet the needs of the country as quickly as possible and arm medical professionals with the number of ventilators needed to save lives,’’ said Chris O. Brooks, Ventec’s chief strategy officer.

The only thing missing was clarity from the government about how many ventilators they needed — and who would be paid to build them.

The shortage of ventilators has emerged as one of the major criticism of the Trump administration’s response to the coronavirus. The need to quickly equip hospitals across the country with tens of thousands more of the devices to treat those most seriously ill with the virus was not anticipated despite the Trump administration’s own projection in a simulation last year that millions of people could be hospitalized. And even now, the effort to produce them has been confused and disorganized.

At the center of the discussion about how to ramp up the production of ventilators is Jared Kushner, the president’s son-in-law and a senior White House aide, who has told people that he was called in two weeks ago by Vice President Mike Pence to produce more coronavirus test kits and who has now turned his attention to ventilators.

He has been directing officials at FEMA in the effort. Two officials said the suggestion to wait on the General Motors offer came from Col. Patrick Work, who is working at FEMA. Some government officials expressed concern about the possibility of ordering too many ventilators, leaving them with an expensive surplus.

As the agency has been sorting through offers, trying to weigh production capability and costs, hospitals in New York and elsewhere were reporting a desperate need for more ventilators which are critical in treating respiratory problems in a fast-rising tide of severe coronavirus cases.

A spokeswoman for FEMA said Colonel Work presented information on each contract in such meetings but did not make any recommendations. A White House spokesman declined to comment.

The involvement of General Motors was first floated earlier this month as the carmaker’s factory floor in Kokomo was grinding to a halt and workers were being sent home — partly because the market was collapsing but also to protect workers from the coronavirus.

Last week, General Motors, Ventec Life Systems and a coalition of business executives called issued a statement saying that Ventec would “leverage GM’s logistics, purchasing and manufacturing expertise to build more of their critically important ventilators,’’ including some portable units.

By Sunday, Mr. Trump sounded at least on Twitter as if a deal was done to mass-produce the ventilators, even though it was unclear who was going to pay for equipping the General Motors plant or how long that process would take.

“Ford, General Motors and Tesla are being given the go ahead to make ventilators and other metal products, FAST! @fema Go for it auto execs, lets see how good you are?”

Not for the first time, Mr. Trump was jumping the gun.

Tesla had in fact engaged in a meeting with engineers from Medtronic in a separate negotiation, but no partnership has yet been announced. And while General Motors’ chief executive, Mary T. Barra, was enthused about the ventilator idea, Mr. Trump’s own aides had not embraced the G.M.-Ventec partnership — in part because they had not seen the specifics of their proposal.

Administration officials said Thursday that they were struggling to understand just how many ventilators the new venture could make.

The initial projection, one senior administration official said, was that after three weeks of preparation it could produce an initial run of 20,000 ventilators, or about two-thirds of what Gov. Andrew Cuomo of New York recently said his state alone needs to cover the influx of coronavirus patients expected in two weeks, if not sooner.

That number then shrank to 7,500 ventilators in the initial run, or maybe 5,000, a recognition, it seemed, that auto transmissions and ventilators had very little in common. Those numbers are in flux and so are the Trump administration’s because the White House cannot decide how many ventilators it wants.

Targets have changed by the hour, officials said, as the Centers for Disease Control and Prevention, the Department of Health and Human Services, the Food and Drug Administration (which approves the use of medical devices) and the White House try to figure out how many ventilators to request and how much they should cost.

Those issues appeared to come to a head on Wednesday afternoon, when FEMA told the White House that it was premature to make a decision.

The $1.5 billion price tag comes to around $18,000 a ventilator. And the overall price, by comparison, is roughly equal to buying 18 F-35s, the Pentagon’s most advanced fighter jet.

So on Wednesday, despite the President’s tweet three days earlier, FEMA was still weighing competing offers in order to make a recommendation to Mr. Kushner. And it seemed clear to several officials that the agency would have to select multiple manufacturers, in part to avoid the risk that one production line runs into technical troubles, or that its workers get hit by the same virus the ventilators are being built to defeat.

David Sanger and Zolan Kanno-Youngs reported from Washington, and Maggie Haberman from New York. Ana Swanson contributed reporting from Washington.

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