>> So I wanted to talk to you about this coronavirus-induced
gap between supply and demand.
>> Yeah, Sure.
>> So how much more supply do we need in the United States? Can
you quantify that?
>> That's a really good question. And the answer is no one knows
exactly how much we need because no one knows exactly how bad this
is going to get. One way of quantifying this is to look at
the gap between what states are asking for and what they're
getting from FEMA. So one district, a group of states asked
for 4 million N-95 masks. Those are the ones that filter out
ninety-five percent of particulates, and they got half a
million. When it comes to ventilators, we know how many
ventilators we have in this country. It's around 200,000, and
that includes some older ventilators, some less fully
featured ventilators, like not best case scenario. Hospitals say
looking at where they are now and with the expectation that these
cases are going up, that they definitely need more of them and
fast.
>> Seems like the immediate reaction we're seeing is that
companies that don't normally make these supplies are now
making them. So how does something like that work?
>> Right. So it's important that there are different kinds of
masks. They're also different kinds of ventilators. So if you
think about something like a fabric face mask, which is now
starting to be recommended as something that you might wear
around outdoors, those aren't too heavy of a lift. But if you're
looking at something like an N-95 mask, again, that sort of gold
standard mask for medical professionals, that requires a
really particular kind of material., so access to that raw
material becomes a limiting factor on how much you can make.
So one thing that the federal government has done is they did
place a very large order for masks that are made in the United
States. A lot of these masks, a lot of this personal protective
equipment in general has been made in China. So, you know,
that's obviously a challenge right now when all the world
wants these supplies. Some of those masks won't be delivered
for months, but it means that companies can invest right now in
the resources that they need to build these more of these masks
and know that they'll be able to sell them later on to the
government.
>> All right. Let's talk a little bit more about ventilators, too,
because I feel like there's a little bit more to unpack than
just what face masks. How exactly are we handling this ventilator
shortage?
>> Yes. So one big thing that's happening is that some ventilator
companies here in the United States that normally have very,
very low production numbers are rapidly and massively increasing
their output. And they're doing it in some cases with help from
the automakers. And the automakers have two advantages.
One, they're used to manufacturing on a vast scale.
And two, they have relationships with suppliers that can help them
solve some of these supply chain challenges. The president was
also ordering Ford and GM to make these these devices, but it was a
really confusing period there for a couple of weeks. There were
public statements from the White House about mandating that Ford
and GM make these devices.
>> This afternoon, I invoke the Defense Production Act to compel
General Motors to accept, perform and prioritize federal contracts
for ventilators.
>> Ford and GM said that they were voluntarily starting
production anyway without needing orders from the federal
government. And meanwhile, there actually hadn't been orders
placed by FEMA committing to buy these ventilators. So I mentioned
that with the face masks, the government placed a giant order
to give companies, you know, the confidence to be able to ramp up
production and not worry about being caught flat footed. And as
of the end of March, it hadn't happened yet with ventilators.
>> We thought that we had to deal with as an example, General
Motors and I guess they thought otherwise. They didn't agree. And
now they do. They do agree. And I think we may be able to pull it
out.
>> I would just say that what's happening in the manufacturing
sector is happening very quickly.
>> So some of the messaging from the White House was chastising
companies for not working fast enough.
>> But in just the matter of a couple of weeks to either
increase production and the levels that we're seeing or start
a brand new line. It's really been a remarkably fast effort.
>> So let's talk a little bit more about the government's
response. We've been hearing a lot about the Defense Production
Act. What exactly is that? What does it mean if the federal
government invokes that? -- the president invokes that?
>> Yes. So the Defense Production Act is something that gives the
White House the authority to dictate what private companies do
for the sake of the national interest. So you can order that a
company makes something they don't normally make. That's
gotten a lot of attention. You can't have a government order
take priority over all other orders. You can also step in and
control the supply chain. They can also manage the distribution
of the output. So the DPA is has multiple elements to it. It's
used routinely parts of it by the Department of Defense to give
priority to government contracts. Other parts of it aren't used
very often at all. But manufacturers and states have
been asking the government to use one part of the DPA in
particular, which is managing the distribution of the scarce
resources that we have. So companies say they're going flat
out to make as many of these as they can, but there's pretty wide
consensus between manufacturers and states that ideally you would
have FEMA determining where these limited resources go instead of
having states fight with each other on an open market.
>> Right. Thanks, Camilla. We'll be checking in more as the
situation moves forward. Things are changing at such a fast rate.
>> Thanks, Liz. I'll be here.
>> Right here.