President Donald Trump tweeted that General Motors will sell Lordstown plant to Workhorse Group; GM said discussions are ongoing
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May 08, 2019 12:02 PM

GM plans to sell Lordstown plant to electric truck maker

UAW wants GM to keep the plant and assign a new product

Michael Wayland
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    GM in March idled its plant in Lordstown, Ohio, as part of a massive restructuring to reduce North American capacity. 
    BLOOMBERG

    GM last March idled its plant in Lordstown, Ohio, as part of a massive restructuring to reduce North American capacity. 

    General Motors plans to sell its idled Lordstown plant in Ohio to Workhorse Group Inc., a little known electric truck and drone maker in the state, according to President Donald Trump.

    Trump on Wednesday tweeted that he "just spoke" to GM CEO Mary Barra and "subject to a UAW agreement etc.," the Detroit automaker will sell the plant to "Workhorse, where they plan to build Electric Trucks."

    GM confirmed in a later statement it is in "discussions" with Workhorse and an "affiliated, newly formed entity" to sell the plant. 

    “We remain committed to growing manufacturing jobs in the U.S., including in Ohio, and we see this development as a potential win-win for everyone,” Barra said in the statement. "Workhorse has innovative technologies that could help preserve Lordstown’s more than 50-year tradition of vehicle assembly work.”

    Workhorse is based in Loveland, Ohio, near Cincinnati. Its chairman, Raymond Chess, spent 37 years at GM in a variety of roles that included "global product responsibility for all crossover vehicles," his company biography said. 

    "The move has the potential to bring significant production and electric vehicle assembly jobs to the plant," the GM statement said. "Upon final agreement, the entity, led by Workhorse founder Steve Burns, would acquire the facility. Workhorse would hold a minority interest in the new entity."

    “This potential agreement creates a positive outcome for all parties involved and will help solidify the leadership of Workhorse’s role in the EV community,” Workhorse CEO Duane Hughes said in the GM statement.

    “The first vehicle we would plan to build if we were to purchase the Lordstown Complex would be a commercial electric pickup, blending Workhorse’s technology with Lordstown’s manufacturing expertise," Burns said in the statement. 

    It was unclear when the parties expect to complete negotiations. 

    "Upon final agreement with all parties, work could begin immediately to prepare the facility for new production," the statement said.

    The UAW was unimpressed by the announcement, contending that GM instead should assign a new product to the facility. 

    “In response to General Motors’ announcement today, the UAW’s position is unequivocal:  General Motors should assign a product to the Lordstown facility and continue operating it,” UAW Vice President Terry Dittes, director of the UAW-GM Department, said in a statement.

    GREAT NEWS FOR OHIO! Just spoke to Mary Barra, CEO of General Motors, who informed me that, subject to a UAW agreement etc., GM will be selling their beautiful Lordstown Plant to Workhorse, where they plan to build Electric Trucks. GM will also be spending $700,000,000 in Ohio...

    — Donald J. Trump (@realDonaldTrump) May 8, 2019
    Other GM plant investments

    Trump also tweeted that GM plans to spend $700 million in Ohio in three separate locations, creating 450 jobs. GM confirmed plans to add jobs at its plants in Toledo, Parma and Moraine.

    "I have been working nicely with GM to get this done," Trump tweeted. "Thank you to Mary B, your GREAT Governor, and Senator Rob Portman. With all the car companies coming back, and much more, THE USA IS BOOMING!"

    The Lordstown plant, which had been producing the compact Chevrolet Cruze, was idled in March.

    Trading of Workhorse shares (NASDAQ: WKHS) was halted for volatility at $1.42 after the president's tweet, and ended the day tripling to close at $2.65. Workhorse's website also crashed for a time. The company went public in 2010. 

    ....in 3 separate locations, creating another 450 jobs. I have been working nicely with GM to get this done. Thank you to Mary B, your GREAT Governor, and Senator Rob Portman. With all the car companies coming back, and much more, THE USA IS BOOMING!

    — Donald J. Trump (@realDonaldTrump) May 8, 2019
    Business opportunities

    Lordstown Assembly was one of five North American plants that GM announced plans to idle this year and potentially close in November to reduce overcapacity.

    GM has consistently said that it “would consider any that are truly viable business opportunities” for the impacted facilities. 

    The automaker, as first reported by Automotive News, had discussions with Fiat Chrysler Automobiles NV for its Detroit-Hamtramck Assembly plant in Michigan. Barra said in January that there were also talks with Tesla Inc., but Tesla was “not interested in our GM work force represented by the UAW, so really it’s a moot point.”

    For a startup to take over a 6.2 million-square-foot facility with maximum capacity of 410,000 units would be a difficult task. In March, Trucks.com reported Workhorse was having financial issues and it was postponing “plans for an electric pickup and aircraft to focus on battery-powered lightweight vans.”

    In 2017, Trucks.com said Workhorse built a pre-production work truck, called the W-15, in about nine months. The vehicle had an all-electric range of 80 miles.

    Workhorse on Tuesday reported first-quarter sales of $364,000, down from $560,000 in the first quarter of 2018. It reported a net loss of $36.5 million in 2018. The company, according to its 2018 annual filing to the U.S. Security and Exchange Commission, has incurred net losses of $141.6 million from February 2007 through 2018.

    Philip Nussel contributed to this report.

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