General Motors announces sale of Lordstown plant to electric truck company

Marco Green
November 8, 2019

The acquisition that the two companies announced November 7 ends an era that began when GM opened the complex in 1966.

Terms of the deal aren't being disclosed.

Workhorse shares closed up 27.24% at $3.13.

The deal comes as GM itself is trying to move toward the future with an eye on autonomous and electric vehicles, with plans announced earlier this year to build its own electric pickup truck at a Detroit plant.

The fate of the 6.2-million-square-foot Lordstown plant has been a major focus for Trump, who in June 2017 advised workers in nearby Youngstown, Ohio, that factory jobs were not leaving. At the 2019 McLeod Software User Conference, our host discusses all this with company CEO Tom McLeod.

Trump was so eager to endorse GM's discussions to sell the Lordstown plant that he preempted the announcement of the talks in May by the largest USA automaker and Workhorse. But there also have been plenty of questions about its financial footing.

Lordstown Motors Corp, which is 10% owned by Workhorse Group Inc, has retained OH investment bank Brown Gibbons Lang & Co and is working to raise additional capital, Lordstown Chief Executive Steve Burns said in an interview. "We've raised money to get this far, but the large fundraising starts now", Burns said. "We have to stand up an auto company". The truck will be called the Endurance.

Workhorse Group is meanwhile among the bidders for a lucrative contract to make plug-in mail trucks for the U.S. Postal Service. Workhorse is related to LMC and the former will share intellectual property and electric-drive systems, he told Bloomberg in an interview Thursday (the link was down at the time this article was published).

Acquiring the plant will allow the company formed just months ago to begin seeking more money so that it can begin production of a new electric pickup truck that will be marketed to commercial customers such as utility companies and municipal governments. He wants experienced vehicle assemblers to build the trucks.

GM is committed to future investment and job growth in OH 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 are grow into a manufacturing hub for electrification. "This plant - combined with the legendary capability of the people who work there - is where we will build the work vehicles of the future". The only moving parts on this truck are the wheels.

"I am very encouraged that the Lordstown plant has been acquired by Lordstown Motors Corporation".

The UAW opposed the Lordstown plant sale because of the risk involved.

GM is not investing in the venture. His chief production officer also served as a manufacturing director at Tesla for over three years. "We didn't buy this plant to not fill it up and get to full production", he said.

Other reports by Click Lancashire

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