COVID-19

General Motors, Ventec Life Systems team up to aid respiratory care product production

Eileen Falkenberg-Hull
Mar 22, 2020, 4:21 pm

GM is teaming up with Ventec Life Systems to help with the production of respiratory care products.

Photo courtesy of General Motors

Though General Motors plants are idled by the outbreak of COVID-19, colloquially known as coronavirus, General Motors is stepping up to use their logistics, purchasing, and manufacturing knowledge to aid Ventec Life Systems with the manufacturing of respiratory car products.

The partnership is in cooperation with StopTheSpread.org, the nation's coordinated private sector response to the COVID-19.

According to a statement, "Ventec will leverage GM's logistics, purchasing and manufacturing expertise to build more of their critically important ventilators." This statement does not explicitly say that GM will manufacture ventilators, rather that they will be a resource for Ventec.

"With GM's help, Ventec will increase ventilator production," said Chris Kiple, Ventec Life Systems CEO. "By tapping their expertise, GM is enabling us to get more ventilators to more hospitals much faster. This partnership will help save lives."

StopTheSpread.org has committed to continuing to unite business leaders nationwide to collect resources to complement and support government efforts to battle the outbreak and its consequences.

"We are grateful for the partnership between GM and Ventec Life Systems, which will enable Ventec to drastically scale production of critically needed respiratory care products. This is a vital step in delivering relief to our healthcare system, which is threatened by the spread of COVID-19. As this virus continues to endanger the lives of countless Americans, StopTheSpread.org is working to unite the business community around a common threat to our economy and our way of life. We know the strength of this effort relies on urgent coordination between the public and private sectors in order to get through this crisis."

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Partnership

GM takes $2 billion ownership stake in Nikola, plans to engineer, manufacture Badger truck

General Motors anticipates having $4 billion in returns from its investment.

Photo courtesy of Nikola Corporation

General Motors (NYSE: GM) is expanding its stake in an alternative fuels future. The auto industry giant is receiving a $2 billion equity stake in Nikola (NASDAQ: NKLA) for in-kind contributions relating to the engineering and manufacturing of the company's hydrogen-powered pickup truck, the Badger.

The deal includes putting GM's hand in the full product planning process including engineering, validating, and homologating the Badger for both battery electric and fuel cell electric vehicle variants.

Nikola is one of the most innovative companies in the world. General Motors is one of the top engineering and manufacturing companies in the world. You couldn't dream of a better partnership than this," said Nikola Founder and Executive Chairman Trevor Milton.

Nikola Badger Nikola has revealed renderings of its hydrogen- and battery-powered pickup truck. Photo courtesy of Nikola Corporation

"By joining together, we get access to their validated parts for all of our programs, General Motors' Ultium battery technology and a multi-billion dollar fuel cell program ready for production. Nikola immediately gets decades of supplier and manufacturing knowledge, validated and tested production-ready EV propulsion, world-class engineering and investor confidence. Most importantly, General Motors has a vested interest to see Nikola succeed. We made three promises to our stakeholders and have now fulfilled two out of three promises ahead of schedule."

Nikola says that the engineering and manufacturing process would have cost the company $4 billions in battery and powertrain costs over 10 years and $1 billion in engineering and validation costs. Through its $2 billion investment, GM expects to receive inn excess of $4 billion in benefits between the equity value of the shares, contract manufacturing of the Badger, supply contracts for batteries and fuel cells, and EV credits retained over the life of the contract.

Nikola will utilize General Motors' Ultium battery system and Hydrotec fuel cell technology. General Motors debuted the Ultium battery system earlier this year. It will be an integral part of the company's lineup in the future including the GMC Hummer EV pickup and SUV and Cadillac Lyriq.

Nikola Badger The Nikola Badger powered by hydrogen fuel cell technology will include a water tap in its cabin. Photo courtesy of Nikola Corporation

Nikola is expected to introduce the Badger in early December. Badger is expected to enter production by the end of 2022. Deposits are currently being accepted for the model. Early in the reservation process, Milton divulged that 1,500 people per day were reserving the truck.

Another side of the Nikola business deals with tractor trailer technology. General Motors will be the exclusive supplier of fuel cells globally (outside of Europe) to Nikola for Class 7/8 trucks. This will allow Nikola to validate and scale to a possible multi-billion dollar operation.

Nikola remains an independent company. The investment is subject to customary antitrust regulatory approval and closing conditions. The parties anticipate closing the transaction prior to Sept. 30, 2020.

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Collaboration

Honda, General Motors sign agreement to share vehicle platforms, co-develop vehicles

The Honda-GM agreement will allow for collaboration on a number of fronts.

Photo by Getty Images

On the heels of successful collaboration regarding the implementation of electric vehicle technologies, General Motors and Honda have announced the signing of a non-binding memorandum of understanding that will increase the level of partnership between the two companies.

This isn't the first time that Honda and GM are collaborating. They have been working together on a variety of projects for over 20 years, including the Cruise Origin.

"This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources. Given our strong track record of collaboration, the companies would realize significant synergies in the development of today's vehicle portfolio," said Mark Reuss, president of General Motors.

The agreement is seen as a step toward creating a North American automotive alliance in a vein similar vein to the Renault-Nissan-Mitsubishi Alliance. In that alliance, the three companies share a portion of the development, engineering, and production costs of vehicles and future technology. The scope of the proposed alliance includes vehicles that will be sold under each company's distinct brands as well as cooperation in purchasing, research and development, and connected services.

This proposed alliance would allow Honda and GM to collaborate on a variety of segments in North America that would share vehicle platforms and electrified and internal combustion propulsion systems. This could mean that we see a full-size Honda truck or a Chevrolet car with a Civic engine in the future.

Additionally, the alliance would allow for better market positioning for materials purchasing negotiations, logistics, and localization strategies.

"Through this new alliance with GM, we can achieve substantial cost efficiencies in North America that will enable us to invest in future mobility technology, while maintaining our own distinct and competitive product offerings. Combining the strengths of each company, and by carefully determining what we will do on our own and what we will do in collaboration, we will strive to build a win-win relationship to create new value for our customers. In this way, Honda will continue making steady progress in solidifying our existing business by realizing strong products, strong manufacturing capability and a strong business structure," said Seiji Kuraishi, executive vice president of Honda Motor Co., Ltd.

Co-development planning discussions will begin immediately, with engineering work beginning in early 2021.

The agreement builds on the electric vehicle platform sharing agreement the two automakers signed in April. In that agreement, Honda will work with GM to develop two new electric vehicles based on GM's global EV platform powered by Ultium batteries.

GM is already part of the Materials Marketplace, an initiative of the United States Business Council for Sustainable Development that works to identify ways to reuse or exchange undervalued materials through an online database and establish circular supply chains. This is designed to lengthen product life cycles and lower the environmental impact of many stages of the manufacturing and design process.

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