After President Donald Trump tweeted yesterday that Loveland-based electric truck manufacturer Workhorse Group is in talks to buy the General Motors plant in Lordstown, Ohio, a flurry of excitement — and confusion — followed the news.
“GREAT NEWS FOR OHIO!,” Trump’s tweet read. “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…”
As it turns out, the details are more complicated — and less certain.
GM closed the plant in March and laid off 4,500 workers there as it ceased production of the Chevrolet Cruz. Workhorse, Trump said, could bring those jobs back.
But the actual transaction GM is discussing isn’t just with Workhorse itself, which currently has just 98 full-time employees, but an as-yet undisclosed startup company led by Workhorse co-founder Steve Burns as the majority owner.
What’s more, Workhorse has lost about $150 million since it was founded in 2007. The company has told regulators that it could run out of money soon.
Trump’s fellow Republican Ohio Gov. Mike DeWine struck a more cautious tone during remarks yesterday about the president’s statements. DeWine noted that “this is probably not the day to celebrate,” saying that the deal would likely be finalized in the fall.
A couple of key pieces will need to fall into place before then.
Workhorse last year won a contract to build 950 electric vans for the United States Postal Service and has also partnered with a Singapore-based company to compete for a $3.6 billion contract replacing many more USPS vehicles.
Winning that contract will be “key” to a resurrection in Lordstown, DeWine said.
“If things are not in place for this to happen, this would be very cruel to the workers and the people in Lordstown and the Mahoning Valley,” he said.
But there is a big wrinkle in that assumption: Workhorse co-founder Burns told the Wall Street Journal that the company is planning on employing hundreds — not thousands — of union workers in Lordstown building an electric pickup truck for commercial use. The postal vehicles would likely be built in Indiana should the company land that contract.
There are also some potential stumbling blocks ahead for the deal.
Trump said that the company’s purchase is subject to agreement by the United Autoworkers Union. The union, however, has indicated it opposes the sale of the plant as a lawsuit winds its way through courts.
“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 said in a statement yesterday. “A federal lawsuit filed by the UAW over the closing of the Lordstown, Baltimore and Warren facilities is still pending, and the UAW will continue its effort to protect the contractual rights of its members at these locations.”
Trump also tweeted that GM will be spending $700,000,000 at three locations in Ohio, “creating another 450 jobs.”
The president said he received the information from GM CEO Mary Barra, who called DeWine later in the day to confirm the companies were in talks about the purchase of the plant.
Workhorse posted a $6.4 million net loss in the first quarter of 2019 — though Lt. Gov. Jon Husted noted yesterday that other electrical vehicle companies like Tesla have also posted big losses as they ramp up new technology. According to MarketWatch, Trump’s tweet caused Workhorse’s shares to immediately surge 32 percent.
Ohio’s U.S. Senators both said they wanted to hear more about the plan.
“I look forward to hearing more from Workhorse about its plans to bring jobs to #Lordstown, and I’m hopeful that this news will benefit the workers there,” Sen. Rob Portman, a Republican, said in a tweet. “I’ll continue to work w/ @GM, the @UAW, & other key stakeholders on this matter in the coming weeks & months.”
Portman thanked Trump for his “help in bringing new production to Lordstown.”
Sen. Sherrod Brown, a Democrat and strong union proponent, sounded a much more reserved tone.
“It’s still too early to tell whether the proposed sale of Lordstown is good news for workers there,” he said in a statement. “Workhorse is a leader in electric vehicle manufacturing and we are proud to have them call Ohio home, but GM cannot shirk its responsibility to these workers.”
This article appears in May 8-15, 2019.
