U.S. kills Philips deal, won’t buy over 30,000 more ICU ventilators

Business

The United States government canceled a contract for the supply of thousands of ventilators by Philips, the Dutch technology company said on Monday. Philips was set to deliver over 30 thousand more ventilators to the U.S. by December. The cancelation seemed to be a surprise for Philips. The reason behind it is unclear.

In April, the American government ordered 43 thousand ventilators from Philips, primarily to treat patients in intensive care units. The contract, signed as the coronavirus crisis increased demand for the medical machines, stated that the delivery would take place in stages up to and including December this year. But the Americans put a premature end to that.

Philips CEO Frans van Houten did not say why the contract was canceled, but the cancelation did seem to come as a surprise, as he specifically said that Philips “delivered on our commitments”.

The company will complete its deliveries for this month and then stop fulfilling the original order. That will mean that the Dutch firm delivered a total of 12,300 of the 43 thousand which were ordered for the Strategic National Stockpile.

Van Houten pointed out that Philips significantly increased its ventilator production, due to the increased demand sparked by the coronavirus pandemic. “We achieved a fourfold ventilator production expansion with substantial investments: we hired hundreds of new colleagues for our factories in the U.S and called upon our supply chain partners to massively step up, all in response to the Covid-19 pandemic,” he said.

The CEO said that Philips is “disappointed” by the cancelation of the U.S. contract “in light of these vast efforts,” according to a statement from the company. “The Covid-19 pandemic is far from over, and we will continue to focus on our triple duty of care: meeting critical customer needs, ensuring business continuity, and safeguarding the health and safety of our employees,” Van Houten said.