The fledgling electric-vehicle maker that wants to take over General Motors' former Chevrolet Cruze plant in Ohio booked less than a single Cruze worth of revenue last quarter.
But the grim earnings report from Workhorse Group isn't deterring GM in its efforts to sell Lordstown Assembly and ease the political pressure it has faced over idling the factory. Other variables are at play, including negotiations with a skeptical union, the availability of funding for such a purchase and Workhorse's effort to win a coveted contract from the U.S. Postal Service to potentially build the next generation of mail trucks in Lordstown.
Meanwhile, another finalist for the mail-truck order, Indian automaker Mahindra, said last week it aims to revitalize another former GM site — the sprawling Buick City complex in Flint, Mich. — with some 2,000 jobs if it wins the contract.
Amid GM's discussions with Workhorse and the early stages of talks with the UAW on a new labor pact that could settle Lordstown's fate, the automaker said all but about 135 of the plant's 1,200 workers had accepted transfers to other locations. But union leaders continue to demand that GM assign Lordstown a new vehicle to build instead of offloading the plant to another company.
"The union has been very clear about Lordstown. They want GM to put a product there," said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research in Ann Arbor, Mich. "They're not moving on to the next phase of, how we're going to represent workers at Workhorse."
Since GM confirmed in May that it was exploring a sale to Workhorse, the EV maker has formed a separate, privately held company called Lordstown Motors Corp. That company is dedicated to raising capital for the purchase and executing it, Workhorse CEO Duane Hughes told investors last week.
Workhorse plans to enter a license agreement with Lordstown Motors for specific intellectual property and technology and will have a minority interest in the new company. Lordstown Motors wants to produce a battery-electric pickup based on the Workhorse W-15 pickup, Hughes said.
"We believe that combining our IP with the historic GM Lordstown facility will provide Workhorse with the greatest benefit in monetizing its pickup truck technology," Hughes said. "In the end, we believe this will be the proverbial win-win."