President Donald Trump attacked 3M over concerns with supplies of protective face masks as his administration issued an order under the Defense Production Act to speed production of ventilators and respirators for coronavirus patients.
The president said at a White House news conference he signed an “element of the act against 3M” that allows the Federal Emergency Management Agency to obtain as many N95 respirators as it needs from the company. Trump tweeted Thursday evening that the company would “have a big price to pay” for its handling of the masks, without specifying the problem.
We hit 3M hard today after seeing what they were doing with their Masks. “P Act” all the way. Big surprise to many in government as to what they were doing – will have a big price to pay!
— Donald J. Trump (@realDonaldTrump) April 3, 2020
3M responded hours later with a statement, saying early Friday that it has increased production of respirator masks significantly and was already working with the administration to prioritize orders from the Federal Emergency Management Agency. The latest actions offer a framework to “expand even further the work we are doing in response to the global pandemic crisis,” 3M said.
“We’ve been in constant discussions” with the administration, 3M Chief Executive Officer Mike Roman said Friday on CNBC. “The narrative that we aren’t doing everything we can as a company is just not true.”
The company pushed back against what it described as a White House request to stop exporting the products from the U.S. While 3M said it has worked to increase the number of masks imported from its overseas factories, including approval to ship 10 million respirators from China, part of its U.S. production is needed in Canada and Latin America.
There would be “significant humanitarian implications of ceasing respirator supplies to healthcare workers” in neighboring countries, 3M said in the statement. The company has ramped up production to 100 million masks a month, about 35 million of which are produced in the U.S.
The statement continues, in part:
The Administration also requested that 3M cease exporting respirators that we currently manufacture in the United States to the Canadian and Latin American markets. There are, however, significant humanitarian implications of ceasing respirator supplies to healthcare workers in Canada and Latin America, where we are a critical supplier of respirators. In addition, ceasing all export of respirators produced in the United States would likely cause other countries to retaliate and do the same, as some have already done. If that were to occur, the net number of respirators being made available to the United States would actually decrease. That is the opposite of what we and the Administration, on behalf of the American people, both seek.
3M fell 1% to $136.51 at 9:32 a.m. in New York.
Executive Order
Trump earlier Thursday signed an executive order directing the Department of Health and Human Services to ensure that General Electric Co., Hill-Rom Holdings Inc., Medtronic Plc, ResMed Inc., Royal Philips NV, and Vyaire Medical Inc. obtain needed supplies. The order does not name the suppliers to companies manufacturing ventilators.
Trump said in a statement the order would “more fully ensure that domestic manufacturers can produce ventilators needed to save American lives.”
Philips, a leading maker of ventilators, called Trump’s action a positive development. “We welcome any help to make the supply chain more robust,” said spokesman Steve Klink. “It is not enough if one company scales up, everyone has to scale up.”
The Dutch firm needs more than 650 components for the ventilators it produces in two factories in America, with more than half coming from Europe and Asia and the rest from suppliers in the U.S. Beyond hospital ventilators, Philips is also set to start delivering 10,000 portable ventilators to the U.S. later this year.
Price Gouging
Though Trump didn’t detail his concerns with 3M, White House trade adviser Peter Navarro said at a Thursday news conference that the administration has had concerns about whether the company’s production around the world is being delivered to the U.S.
Dallas Mavericks owner Mark Cuban said he has been in touch with the White House about supposed price gouging by resellers of 3M masks and accused the company of not doing enough to ensure they end up in the hands of medical professionals.
3M has previously said it hasn’t changed the prices it charges and can’t control the prices dealers or retailers charge for their products.
The president is facing mounting pressure from governors and congressional Democrats to use the Korean War-era defense law that gives him sweeping powers to force companies to produce personal protective equipment and ventilators that are in short supply. More than 236,000 people in the U.S. have contracted the virus and more than 5,600 have died, according to Johns Hopkins University.
Health-care officials and governors have said that in some localities, people may die because there won’t be enough ventilators for the growing number of patients who need them.
New York Governor Andrew Cuomo on Thursday said the state would run out of ventilators in six days at the current rate. “If a person comes in and needs a ventilator and you don’t have a ventilator, the person dies,” Cuomo told reporters.
Ventilator Shortage
Trump said at the White House later on Thursday that “thousands” of ventilators are in production. But he faulted states for failing to stockpile them, deflecting criticism of his administration.
“We’re not an ordering clerk, we’re a backup,” Trump said. “The states have to stock up. It’s like one of those things, they waited.”
He has expressed reluctance to use the defense law, comparing it to nationalizing industries. He has said he prefers to use threats to invoke the act as leverage to force companies to comply with demands to manufacture equipment.
The president, however, ordered General Motors Co. last Friday to make ventilators by directing the U.S. health secretary, under the defense law, to require the automaker to do so.
—With assistance from Ellen Proper.
