CEO says GM plant would help Workhorse land USPS contract
LORDSTOWN — Should a company affiliated with Workhorse Group Inc. acquire the idled General Motors assembly plant in Lordstown, it would be a potential “game changer” in the electric truck maker’s effort to secure a contract to produce delivery trucks for the U.S. Postal Service.
From the onset of talks with GM, the sprawling 6.2 million-square-foot facility was viewed as a “potential competitive advantage” to landing the $6.3 billion contract with USPS, said Workhorse CEO Duane Hughes.
“Primarily just because of (the plant’s) size and so on, its ability to push through vehicles out of that plant — not to mention they’ve got 50-plus years of experience on how to build vehicles in that facility,” Hughes said.
Workhorse, based in Cincinnati, is among a handful of companies vying for the postal service contract that, if landed, might translate into the vehicle being made at Lordstown should the plant’s sale be finalized.
Workhorse intends to sign a deal with affiliate Lordstown Motors Corp. to build the battery electric pickup truck based on Workhorse’s technology and platform for its W-15 truck. The deal also calls for Workhorse to own a minority portion of Lordstown Motors.
“Because the W-15 truck we built a couple years ago was born from our design and development of our six prototype postal service vehicles, we believe that when the new W-15 comes to market in Lordstown — because they can build the W-15, which is predicated on the same parts, the same underlying type of infrastructure — it would easily allow for the post office vehicles to be built in Lordstown,” Hughes said.
GM announced in May it was in talks to unload the plant to the fledgling company operated by Workhorse founder and former CEO Steve Burns. In March, production at the plant stopped as part of GM’s plan to idle four of its U.S. plants.
Hughes said combining Workhorse technology and the Lordstown facility will give the company the “greatest benefit in monetizing its pickup technology.
“In the end, we believe this will be the proverbial win-win,” Hughes said.
Questions about Workhorse’s financial stability have risen since it became public the company would be connected to the Lordstown plant. Also during that time, officials renewed their calls for GM to assign a new vehicle to the plant, which for about 10 years had produced one of the company’s better-selling vehicles — the Chevrolet Cruze.
Local United Auto Workers members hope contract talks now between GM and the UAW will result in the automaker assigning a new vehicle to the unallocated plant.
If sale talks between GM and Workhorse reach a point to where a deal is near, the UAW would have to OK the sale of the plant, said GM spokesman Dan Flores.
Workhorse released its 2019 second-quarter financial report Tuesday. Sales for the period were at $6,000, down from $171,000 in the second quarter of 2018, primarily due to a decrease in the number of trucks delivered, according to a company release.
The company lost $36.9 million in the quarter. But officials highlighted $25 million in private financing it secured for research and development for its N-GE N vehicle and to fill vehicle orders in a backlog.
The numbers, however, haven’t impacted sale talks.
“Discussions continue to move forward in a positive direction,” Flores said. “We continue to focus our efforts on securing a final agreement.”