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Comment by propogandist | Hacker News Reader

There was an oversupply of ventilators after the initial panic and hysteria in the media with the likes of NY and other states not using what was available to them. The ventilator order was placed in April, which was the peak of the hysteria.

You're suggesting the government should spend $650 Million in tax payer money for something that is unnecessary and comparing it to the mask shortage? You're comparing apples and oranges trying to push your orange man bad narrative unncecessarily. 3M and a few other companies produce N95 masks stateside.

>>On Jan. 30, the last day for which data is available, China managed to import 20 million respirators and surgical masks in just 24 hours. Through February, civic-minded entrepreneurs and aid groups visited pharmacies in affluent countries and emerging markets alike, buying masks in bulk to send to China.

https://www.nytimes.com/2020/03/13/business/masks-china-coro...

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There was no hysteria. There is standard decision-making with uncertainty. Early in the pandemic, ramping up ventilator, mask, and other production made 100% sense. That's a $1 billion hedge to help with what's turning out to be a multi-trillion dollar problem.

Indeed, it's a no-brainer decision. The expected ROI of a $1 billion ventilator order in April was astronomically high.

Conversely, cancelling the contract makes sense too, now that ventilators don't seem to be the solution. Generally, when a contract is cancelled, you pay for costs already incurred, so it's generally not unfair to do so.

We promised our supplier that we would buy 30,000 ventilators. I don't know what the actual contract said but if I started ramping production in consideration of a $650 million order and my client canceled the order I would certainly try to recover some damages from them.

These were opportunistic money grab operations from for-profit companies. What's been linked is a business article which primarily includes a statement where the CEO of the for-profit company is quoted to simply say

>“It’s very unusual to have a contract like this canceled,”

noting that Philips reducing their FY profit outlook as a result, to help investors make an decision on their investments.

It's also very unusual for the government to give a company $650M dollar contract so quickly. It's obvious they wanted Philips, who was clearly perceived to be a leader in the space, to ramp up supply expecting a massive surge demand, which did not materialize. A business decision was made to cut the contract that was no longer needed.

You're welcome to try and go against the client to recover "damages" and risk future contracts from said client.

The whole point of these fast capacity ramps is that the capital investment may not be recovered over a longer period. So it's critical the order be solid before you ramp capacity.

Philips getting screwed - yeah, not going to be doing business with the govt in the future. We wonder why folks are reluctant to respond to govt directives, because the govt is schizophrenic about this stuff.

At-least they got a proper business contract and decent $ rather than the government using the defense production act to take over operations.

https://www.nytimes.com/2020/03/20/us/politics/defense-produ...

>You're welcome to try and go against the client to recover "damages" and risk future contracts from said client.

The govt is welcome to pre-pay next time it needs something urgently.

> You're welcome to try and go against the client to recover "damages" and risk future contracts from said client.

I love a good threat.

> You're suggesting the government should spend $650 Million in tax payer money for something that is unnecessary and comparing it to the mask shortage?

Yes, because next time we beg a company to ramp up production of something, it might wind up being necessary.

There's a benefit to government taking on some of the risk in these sorts of scenarios.

hysteria in the media

I don't think it was hysteria in the media, it was the belief early on by the medical field that respirators were the best treatment for COVID patients.

I'd like to think that the government bought those respirators due to medical demand, not because what they read in the newspaper.

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