Yahoo Finance How Elon Musk helped Medtronic tackle a ventilator crisis amid COVID-19
A spike in coronavirus cases across some regions of the U.S. has prompted a need for ventilators in area hospitals reminiscent of the ventilator crisis at the outset of the pandemic in the spring of 2020.
Hospitals in Omaha, Nebraska on Tuesday reported a record number of patients on ventilators and a hospital in Keene, New Hampshire on the same day requested additional ventilators from the state government. Luckily, the U.S. no longer faces a shortage of the life-saving equipment.
The surge in production of ventilators at the onset of the crisis last year sprang in part from a little-known conversation between Tesla (TSLA) CEO Elon Musk and Geoff Martha, the CEO of Medtronic (MDT), one of the world's leading ventilator manufacturers.
Musk, whose company SpaceX helped manufacture a key ventilator part, struck a friendly tone in the midst of stressful early days of the pandemic and demonstrated a deep understanding of the engineering details, Martha says.
Medtronic, the supplier of a third of the world's ventilators, produced 200 per week prior to the pandemic but quickly ramped up production to 1,000 per week, Martha told Yahoo Finance in a new interview.
To ramp up production, Medtronic first had to overcome a supply chain disruption that caused a shortage of key parts. Medtronic took the unusual step of posting its ventilator designs online, and an engineer at SpaceX noticed that a critical part of Medtronic's ventilators matched a part used in SpaceX rockets, Martha said.
"If you think about [it], a spacecraft has a life support system on it — a ventilator is a life support system," Martha says.
"Next thing you know, I'm on the phone with Elon Musk, and he really became a good partner of ours," Martha adds.
The phone call between Musk and Martha, held in the spring of 2020, came about to confirm the value of a partnership between the two companies they led, Martha says.
"[Musk] wanted to validate that we really needed it, and they could really be of assistance, but he was very supportive, and very easy to talk to," Martha says. "I was surprised, given all the businesses he has, how much he knew about this one part."
"He told us the whole story [about] how he saw the supply chain was not very reliable," Martha adds. "And he decided to insource it."
"He was very down to earth, very friendly, and very deep into the details, and was very helpful," Martha says.
In addition to the help from Musk, Medtronic formed partnerships with tech company Intel (INTC) as well as manufacturers in Bangladesh, India, Canada, and the United States in order to amplify its production, Martha said.
When the spread of the coronavirus became widely known last March, U.S. hospitals had roughly 160,000 ventilators, plus an additional 12,700 machines in the U.S. stockpile, The New York Times reported. Five months later, in August 2020, the U.S. stockpile had 95,713 ventilators, the Washington Post found.
"It was a big moment for us," Martha says. "It was a health crisis — it was a human crisis around the world."
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