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General Electric (GE) and Ford (F) stocks jumped by over 5.50% on Friday, as companies signed a $336 million federal contract to make ventilators urgently needed for coronavirus patients.
General Electric (NYSE: GE) and Ford Motor Company (NYSE: F) stocks jumped over 5% after the market opened on Friday, April 17, 2020. The rise is strongly attributed to the $336 million federal contract which they signed to make 50,000 ventilators for the coronavirus patients. Breaking down the cost, one ventilator machine will cost around $6,720.
At the time of writing, Ford stock is trading at $5.08 (+2.73%). GE stock is at $6.56 (+5.13%).
The announcement has rejuvenated the trust in their stock market, at a time when the coronavirus has crashed the traditional market almost to their knees.
Analyzing their daily chart, for GE, the price has rebounded on a strong resistance where it hit its lowest point, while ford is still feeling the effect of the virus largely. Most of Ford’s production had been stopped as the demand for their cars had declined due to the travel restrictions.
General Electric and Ford Federal Contract Deal
According to a post on CNBC, the companies are expected to produce the life-saving devices at a facility in Michigan, as from next week. In the contract, the companies are expected to deliver the ventilators by July 13.
Ventilators are critical machines in managing the coronavirus effect, where patients with difficulties in breathing get much-needed help from the machine. Ventilators are different, where some are so advanced to give patients the specific needed air, and in turn, save their precious lives.
That explains the reason why the ventilators made by General Motors and Washington-based Ventec Life System cost $10,000 more than the ventilator to be made by GE and Ford. General Electric will be delivering the second federal contract after the previous deal of 2,400 ventilators was announced last week. The previous deal saw each ventilator cost about $26,000 per unit, reciprocating to a $64.1 million deal.
According to Ford’s spokesman, the ventilators will be produced at-cost, whereby the companies will not be benefiting financially from the deal. Tom Westrick, the Vice President and chief quality officer of GE Healthcare, said:
“Basic ventilators are well-suited to address urgent needs during the COVID-19 crisis.”
Through an email, Ford wrote, ‘we appreciate the federal government’s action and will continue to work closely with the administration to meet the immediate needs of the coronavirus patients.’
The ventilator will be licensed by Air Corp, a small privately held company that specializes in high tech pneumatic life support products.
The department of Health and Human Services announced that it had finalized more than 41,000 ventilators by the end of next month, and over 187,000 of them by the end of the year.