GM finalizes sale of Lordstown plant to Workhorse-affiliated EV builder

Well, what do you know! It appears the historic Lordstown deal is going to happen after all. Lordstown Motors (LMC) has formally announced its acquisition of the former GM manufacturing complex in Lordstown, Ohio. LMC, a spin-off of Workhorse Group (NASDAQ: WKHS), plans to begin production of an electric pickup at the Lordstown plant starting in late 2020.

EV fans have been excited about the deal from the beginning, but also more than a little skeptical, because of the bizarre way in which the plan was first announced, and because of doubts that a small startup company would be able to muster the financial resources to take over such a large manufacturing plant. Now it’s plain that the deal will go forward, although significant aspects remain unclear.

Lordstown Motors and Workhorse are two separate companies. However, Workhorse owns 10 percent of Lordstown, and former Workhorse CEO Steve Burns is the new CEO of Lordstown. Lordstown will license components of Workhorse’s electric drive technology, and will also take over 6,000 existing pre-orders for Workhorse’s prototype W-15 pickup truck.

Burns told journalists that Lordstown has the money to buy the plant, but “we are going to be fundraising for a while” in order to finance retooling, development and homologation.

Workhorse is one of five bidders on a contract to provide the US Postal Service’s next-generation delivery truck. The deal, which has been under consideration for several years, would involve delivering as many as 180,000 trucks, and could be worth as much as $6.3 billion. A decision is expected by the end of the year. The possibility of building the new trucks in Lordstown has been raised, assuming that Workhorse wins the work.

Even without the USPS truck, if all goes well in Lordstown, the deal will be a major electrification milestone, and a win for all concerned. Consumers will get a badly needed electric pickup truck, the US auto industry will get to hold on to a chunk of the EV industry, resisting the magnetic pull of China, and at least some of GM’s workers will get a chance to transition to new jobs with a future.

“We are committed to the people of Lordstown, we will locate our headquarters in the Lordstown plant, and we plan to build the Endurance pickup truck utilizing experienced workers who helped produce millions of vehicles in this very same plant,” said LMC CEO Steve Burns.

“The quality and precision of the production robotics and equipment in the Lordstown facility is evident,” said LMC Chief Production Officer Rich Schmidt, who was formerly Director of Manufacturing at Tesla. “Our team feels this is a factor to help us hit the ground running in building the Endurance pickup truck.”

It’s obvious that GM has a big stake in making this venture successful, but the nature of its financial commitment is unclear. The company has discussed building a battery cell plant in the Lordstown area, which might create about 1,000 jobs. “GM is committed to the future investment and job growth in Ohio and we believe LMC’s plan to launch the Endurance electric pickup has the potential to create a significant number of jobs and help the Lordstown area grow into a manufacturing hub for electrification,” said the automaker in a statement.

GM has said the LMC operation would create about 450 jobs, and “a person familiar with the plans” told the Detroit Free Press that these positions are likely to start at $17 an hour.

Reaction to the news from former Lordstown workers was mixed. A few still seemed to be clinging to the hope that GM would restart production of the retired Cruze sedan. However, union authorities sounded cautiously hopeful.

“Nothing’s ever going to replace the 5,000 jobs in the GM plant and all the spinoff jobs,” said Tim O’Hara, President of UAW Local 1112. “For the Mahoning Valley, any job is a good job, but we don’t know what the jobs will pay and how many will be offered. If these turn out to be union jobs, it’ll be good for the valley from that aspect.”

Neither GM nor LMC has met with the union, nor have they yet indicated when tooling, hiring and production would begin.

“If they’re going to be union represented, we’d like Local 1112 to be their bargaining agent when that time comes,” said O’Hara. “We don’t want the local to go away and that was a fear of ours after the contract ended.”

Source: AP, Electrek, Green Car Reports, Detroit Free Press

  • Markthetog

    The only thing that implies any credibility to this outfit is the presence of Rich Schmidt. OTOH a lot of good people have been swindled by fast talking hucksters.

  • More2bits

    Workhouse is dead on arrival with it’s lowly 5,000 lb towing which just doesn’t cut it for serious work.

    • Bob Green

      I’m a tall guy and I require a truck sized EV just to fit inside one comfortably. Also as an electrician I need lots of room but at most I’ll be hauling 500 pounds in the bed of the truck and upon the tool rack. Every truck has its purpose and its buyer and I have a free source of electricity to plug into so that means free gasoline for me.

  • freedomev

    Since they have little money and burning through it plus the Lordstown plant is like 10x what is needed and they don’t need any of the body shops, the biggest asset there as Workhorse uses composite bodies.
    Great designs in the Nvan, Pickup, they just need to be built instead of them playing with drones.
    And others should do the same as there are 50million of these that need to be built in 15 yrs.
    Morebits below has no clue. For what it is designed for, the Workhorse is fine.

  • Jon Carr

    GM sucks. They could have built this EV at the Lordstown plant, instead they build this EV in China after the US taxpayer bails them out.