In the News
Sep 03 2020
Wichita Business Journal | Daniel McCoy
Sen. Jerry Moran said Thursday that he is looking for answers as to why a federal contract for ventilator production is coming to an early end, hoping that the deal’s local support of around 1,000 jobs can be continued.
The U.S. Department of Health and Human Services said this week that it is terminating contracts early for ventilator production because the national stockpile is already full, with one contract for those fulfilled locally by Spirit AeroSystems Inc. and Chicago-based Vyaire Medical Inc.
The contract cancellation would result in that partnership delivering no more than 4,000 of the 22,000 ventilators that had been planned for HHS.
Touring the Spirit AeroSystems Vanguard Facility at Wichita Dwight D. Eisenhower National Airport — where Spirit (NYSE: SPR) and Vyaire set up production in a former Honeywell building in May — KFDI News reports that Moran said Thursday he believes there is still domestic and international demand that can be met by continuing the local work.
“There’s an awfully good argument that it would make a lot more economic and health-care sense if we continue to manufacture here because the federal government is under contract to pay for most of what has already been done,” Moran said.
The Kansas Republican also said during the stop, which was scheduled before the announced cancellation, that he is working to set up a meeting with HHS Secretary Alex Azar to discuss the situation.
At the time the partnership was announced, Spirit said the program would include around 700 of its workers that would’ve been otherwise out of work as part of one of multiple mass layoffs at the company this year.
The work, which also includes around 300 Vyaire workers at the local facility, had originally been expected to run through October.
Spirit said earlier in the week that locally built ventilators had also already been shipped internationally, with company CEO Tom Gentile saying Thursday that 12,000 units had been delivered from the local facility in less than three months.
Hailed by local officials as an example of rapid diversification, the partnership has helped stave off hundreds of more local layoffs, at least temporarily, as Spirit wrestles with the 1-2 punch of the ongoing grounding of the Boeing Co.’s (NYSE: BA) 737 MAX and output cuts on other programs at both Boeing and Airbus due to the impact of Covid-19.
The company has laid off nearly 5,000 workers in Wichita since January as a result, cuts that have been further amplified by reductions in its local supply chain.