Ventilator Maker Hamilton May Open U.S. Factory With Automaker

(Bloomberg) -- Hamilton Medical AG, whose life-saving ventilators are suddenly in urgent demand amid the coronavirus pandemic, is in talks with an automaker to sharply increase production by opening a factory in Reno, Nevada.

“Extraordinary times call for extraordinary measures,” Bob Hamilton, the chief executive officer of the company’s U.S. business, said in a phone interview on Tuesday. “We are looking at extraordinary measures to increase capacity.”

Hamilton declined to name the automaker involved in the talks, but said it would be revealed if the deal comes together in the next few days. He acknowledged recent discussions with General Motors Co. but said other large manufacturers had approached the company as well. Hamilton’s U.S. headquarters are in Reno, and Tesla Inc. has a massive battery factory nearby.

Hospitals in the most hard-hit areas of the world, including Italy and Spain, have seen sick coronavirus patients outnumber supply of ventilators, which take over breathing by pumping air and oxygen into the lungs. That’s led health-care facilities and governments around the world to scramble for any available machines.

Bonaduz, Switzerland-based Hamilton, which says it made about 15,000 ventilators last year, has already disclosed plans to double its rate of production by the end of April at its lone existing assembly plant in its home country. The potential U.S. factory might increase the company’s output by further multiples of last year’s, Hamilton said. He said he couldn’t estimate when a new facility would be operational.

Hamilton Medical’s U.S. operations include sales, distribution and service. Bob Hamilton is a third-generation member of the company’s founding family.

After sharply curtailing car production around the globe, automakers have been exploring ways to help ventilator makers boost output, especially by tapping sprawling, global supply chains to help locate scarce parts. Ford Motor Co. said on Tuesday that it’s working with General Electric Co.’s health-care unit to begin production of a simplified ventilator by June.

GM has revealed plans to assist Ventec Life Systems Inc. with logistics and other tasks to boost production and is exploring the feasibility of building ventilators at one of the automaker’s facilities in Indiana. Elon Musk, the chief executive officer of Tesla and SpaceX, held talks over the weekend with Medtronic Plc about ventilators and has said his companies will make them.

“Components are going to be what really drives this,” Hamilton said. “The biggest pinch-point we currently have is the supply chain. It’s easier to add bodies, and we’ve got the process of building ventilators down pat. It’s adding bodies and making sure you have the materials.”

So far, Hamilton said, the company hasn’t faced any major disruptions in its parts network during the coronavirus crisis. Romanian officials briefly halted export of some components for the company’s humidifiers, and some circuit-board suppliers in Southeast Asia were shut down, but both issues were quickly resolved, he said.

Hamilton Medical estimates that it had about a quarter of the pre-crisis ventilator market, which it pegs at more than $1 billion a year. A single full-feature ventilator can cost as much as $45,000. Most of the major manufacturers have disclosed plans to boost production, including by adding shifts or running assembly plants around the clock.

©2020 Bloomberg L.P.