Lordstown Long Shot? Skepticism Greets GM-Workhorse Talks

Steph Willems
by Steph Willems
lordstown long shot skepticism greets gm workhorse talks

Yesterday’s news that General Motors is in talks to sell its mothballed Lordstown assembly plant to an affiliate of Cincinnati’s Workhorse Group was met with surprise and no shortage of doubt.

For starters, the company ended last year with 98 employees. It’s still a fledgling startup, eager to sell a range-extended light duty pickup alongside its electric step vans, some of which have found a home with UPS. Workhorse is chasing larger game, however, throwing its hat in the ring for the U.S. Postal Service’s lucrative next-generation van contract. Most observers believe Workhorse’s acquisition of the Lordstown plant hinges on securing that contract.

“We have a long way to go,” Ohio Gov. Mike DeWine told The Youngstown Vindicator following GM’s announcement, which followed a revealing tweet by President Donald Trump. “Cautious is probably the right word.”

According to GM, an “affiliated entity” led by Workhorse founder Steve Burns would acquire the facility, with Workhorse Group holding a minority stake.

“The first vehicle we would plan to build if we were to purchase the Lordstown Complex would be a commercial electric pickup, blending Workhorse’s technology with Lordstown’s manufacturing expertise,” Burns said.

A commercial pickup, in this case Workhorse’s W-15 extended-range truck, is not a step van. The company hopes to become the winning entry in the USPS’ Grumman LLV replacement program with a van based on its W88 chassis, offered as a 100-mile fully electric version or a range-extended model utilizing a three-cylinder BMW powerplant as a generator. That’s the same setup employed by the W-15.

There’s no shortage of competition for that contract.

“The development of the pickup will leverage the R&D performed for the USPS award, greatly accelerating the production process,” the company stated in a 2017 presentation.

Lordstown Assembly once held three shifts of workers building the Chevrolet Cruze before falling sales thinned its ranks. The plant’s footprint is 6.2 million square feet, greatly exceeding Workhorse’s current 300,000 square feet of production space. Only a huge contract, backed up by a lot of capital, could turn Lordstown into a Workhorse plant.

“It’s not the day to celebrate yet for the Mahoning Valley or Lordstown or the workers,” DeWine said. “For this really to work, it’s going to be important for Workhorse to get the contract with the postal service.”

Workhorse has never been profitable; the company’s 2018 finances reveal sales of $763,173, expenditures of $21.8 million, and $1.5 million in available cash (per NBC affiliate WKYC). In January, Workhorse secured $35 million in financing from Marathon Asset Management, a move Seeking Alpha called “effectively another last-ditch effort to avoid bankruptcy.”

Dave Green, the UAW Local 1112 president who represented Lordstown workers, didn’t know what to make of the development, saying, “It’s really too soon to say how it will affect our members.”

The nature — and financial resources — of Workhorse’s affiliated entity is unknown at this point. Despite that, as well as the still-undecided nature of the U.S. Postal Service contract, Workhorse’s stock (WKHS) rose 214 percent yesterday, closing at $2.65.

[Image: Corey Lewis/TTAC]

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  • James Charles James Charles on May 10, 2019

    I believe an electric work truck makes a lot of sense if priced competitively. At the moment they are not competitive for the average trades person. I do believe that an EV truck or van with the current EV range has a much wider market than most believe. Most carpenters, plumbers, etc really don't do many miles a day as most work locally. Pickups need to move back to where they were, simple affordable tools. The problem here is most are empty, tow nothing middle class pose wagons. How big is the market, the mass market for this type of vehicle? This question makes you ask how many manufacturers can this limited market support? I know some will say look at GM, Frod, FCA and the Asians, Germans etc. But look at the cost of their conventional powered pickups. Diesel should be the transitioning energy for larger vehicles as we move towards EV work trucks. So, rather than trying to market a high end vehicle this vehicle needs to be a bare as bones to reduce entry costs.

    • James Charles James Charles on May 10, 2019

      Oh, I don't foresee this venture as rosy as D Thump. Not many people are required for this R&D venture.

  • Buickman Buickman on May 11, 2019

    I don't read wordy posts. get to the point or stay home.

  • MaintenanceCosts Despite my hostile comments above I really can't wait to see a video of one of these at the strip. A production car running mid-eights is just bats. I just hope that at least one owner lets it happen, rather than offloading the car from the trailer straight into a helium-filled bag that goes into a dark secured warehouse until Barrett-Jackson 2056.
  • Schurkey Decades later, I'm still peeved that Honda failed to recall and repair the seat belts in my '80 Civic. Well-known issue with the retractors failing to retract.Honda cut a deal with the NHTSA at that time, to put a "lifetime warranty" on FUTURE seat belts, in return for not having to deal with the existing problems.Dirtbags all around. Customers screwed, corporation and Government moves on.
  • Bullnuke An acquaintance of mine 50+ years ago who was attending MIT (until General Hershey's folks sent him his "Greetings" letter) converted an Austin Mini from its staid 4 cylinder to an electric motored fuel cell vehicle. It was done as a project during his progression toward a Master Degree in Electrical Engineering. He told me it worked pretty well but wasn't something to use as a daily driver given the technology and availability of suitable components of the time. Fueling LH2 and LOX was somewhat problematic. Upon completion he removed his fuel cell and equipment and, for another project, reinstalled the 4 banger but reassembled it without mechanical fasteners using an experimental epoxy adhesive instead which, he said, worked much better and was a daily driver...for awhile. He went on to be an enlisted Reactor Operator on a submarine for a few years.
  • Ajla $100k is walking around money but this is almost certainly the last Dodge V8 vehicle and it's likely to be the most powerful factory-installed and warrantied pushrod engine ever. So there is some historical applicability to things even if you have an otherwise low opinion of the Challenger.And, like I said up thread, if you still hate it will be gone soon anyway.
  • Carlson Fan GM completely blew the marketing of the Volt. The commercials were terrible. You'd swear they told the advertising company to come up with an ad that would make sure no one went out and shopped a Volt after seeing it!...........LOL My buddy asked why I bought a car that only goes 40 miles on a charge? That pretty much sums up how confusing and uninformative the advertising was.