By on May 9, 2019

Image: Workhorse W-15, by Corey Lewis

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.

Image: Workhorse W-15, by Corey Lewis

“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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43 Comments on “Lordstown Long Shot? Skepticism Greets GM-Workhorse Talks...”


  • avatar
    Pig_Iron

    That is too much plant to act as an incubator. Wixom would be a better choice.

    • 0 avatar
      Pig_Iron

      There’s also GM Moraine and Chrysler Pillette.

      • 0 avatar
        bullnuke

        GM Moraine is a Chinese glass plant these days. Workhorse is a bit bigger than a start-up. Workhorse has a Union City, IN., manufacturing facility that has been doing gas to CNG conversion work for some period of time.

        • 0 avatar
          Pig_Iron

          There’s St Thomas, and Ontario Truck. Lots of places with solid work forces available. I was not aware Moraine was taken over. Apparently Ford tore down Wixom. That’s a shame.

    • 0 avatar
      highdesertcat

      I view this as a positive development. Hopefully Workhorse will hire some of the unemployed autoworkers in that area for the conventional assembly labor aspect in addition to bringing in their skilled BEV specialists for the highly technical stuff.

      Certainly is an eye opener/attention grabber for Ford/Rivian,

      Like this is serious business now folks.

      • 0 avatar
        Pig_Iron

        That would be good. :-)

        • 0 avatar
          highdesertcat

          Agreed. Keep in mind that specialty-employers loathe having to train their assembly laborers beyond the absolute-necessary skills required to get the job done. One fear is losing them to the competition.

          Precedence in training their assembly workers were Hyundai’s plant in Montgomery, Mitsubishi’s plant in Michigan, Toyota’s Louisville plant, and Honda’s plant in Mary’sville, which uncovered difficulties in training American labor. Much was written about those difficulties back then, most still apply today.

          Bottom line was that the foreign managers could not understand why American laborers did not have the same sense of urgency as the workers in their respective countries of origin, i.e. Japan, South Korea.

      • 0 avatar
        RHD

        Electric delivery vehicles make a lot of sense. Carrying a small onboard generator just in case (such as doing 14-hour shifts at Christmas) is a terrific idea.
        Hopefully they’ll design and install some hubcaps before too long…

  • avatar
    eggsalad

    I’m sure the folks at the Shreveport S-10 GM plant are happy with all the jobs that were created when Elio bought that factory.

    I.E. zero.

    • 0 avatar
      highdesertcat

      Yup, that is the other side of the coin, labor in the area not smart or skilled enough to do the highly technical work of building EVs.

      I wonder what Dave Ruggles would have to say about this, since such analysis is right up his drag strip.

      • 0 avatar
        Art Vandelay

        I seriously doubt that actual assembly work is any more difficult on an EV than any other modern vehicle, unless of course you factor in that a good chunk of people doing EVs are working in a tent.

        • 0 avatar
          highdesertcat

          Art, I was thinking in terms of the quality of workers who will be applying for those jobs.

          With unemployment in the US at an all-time low I heard that there are now more than a million jobs in America unfilled than there are unemployed workers in America.

          I also heard that President Trump has agreed to raise the H2B visa limit to help American employers get more returning seasonal employees.

          This leads me to believe that the current unemployed Americans are not keepers and that nobody wants them.

          Military retirees at age 38 are highly skilled, highly motivated workers who often do not want to return to the workforce because of tax reasons. It is a vast, untapped source of quality workers.

          BTW, check out newsy-tv (chan 283 on Dishnetwork) or newsy.com to be informed. Not influenced.

          • 0 avatar
            James Charles

            HDC,
            You need orders to support a workforce. This is light years away.

          • 0 avatar
            highdesertcat

            James Charles, I’m thinking in terms of real-world deliveries within 3-5 years.

            Like others have said, it makes more sense for cartage and service businesses to go with BEVs (with a 30-amp aux on-board AC-generator, just in case)

            This is a niche where the early bird gets the worm, so to speak. Unlike Tesla which from conception was aimed and marketed to the wealthy early-adopters in societies, domestic and foreign.

          • 0 avatar
            EGSE

            “Military retirees at age 38 are highly skilled, highly motivated workers”

            Sure wasn’t my experience when hiring people for technical positions.

          • 0 avatar
            highdesertcat

            EGSE, really?

            Please, do tell!

          • 0 avatar
            EGSE

            @HDC

            Dated technical knowledge. Both enlisted “lifers” and “academy” officers (I mean no prejudice with these terms). They worked on what was deployed which was one or more generations behind; we were developing the next gen. The state of the art advances quickly and you have to reinvent yourself every 3 to 5 years. It’s almost a full-time job by itself for an engineer to keep up, meaning taking classes, seminars, extensive self-study, participating in professional associations, etc.

            Motivation. Mostly lifers but not *most* lifers. “Crunches” (16 hour days to pull the schedule in) can be a fact of life in private industry. Yes when you’re exempt (salaried) you’ll eat dinner at work more than you’ll want to (and occasionally see the sun rise when you’re still at work). Heard the “this job is built for two” and it got old when I’m alongside them night after night (a decent manager won’t ask someone to do something they’re not willing to do themselves). Lifers mostly went for technician or engineering tech positions as opposed to circuit design or writing code. Officers looked more towards the management track.

            Attitude….I’ll explain. Mostly officers. Someone must tell them to say they bring “leadership” to their next job. Too often that meant managing from the top down by barking orders. That pi$$es technical people off who work by collaboration and expect their concerns to be heard AND RESPECTED. This can result in some really ugly in-fighting and employee retention problems. You don’t quit your job, you quit your manager. Spouting the “leadership” line at an interview was a red flag. Please guys, don’t go there.

            Had a few that pulled the “I’m a veteran and am entitled to this job”. That will be considered…..only if you are as equally capable as another candidate.

            As I posted in another thread, when looking for technicians the E-5/E-6 ETs from the Navy worked out very well. The Army and Air Force guys *in general* didn’t have the same in-depth troubleshooting skills but were more box-changers. There was a pipeline of DD-214-holding Navy ETs in the D.C. area and places I worked at usually didn’t have to advertise for techs.

            On the other hand, being older the lifers and officers were very mature and respectful. No worries about them showing up hung-over or returning from lunch hammered. Some of the ETs described above could be pretty rowdy and a fair number rode motorcycles, but I rode too and enjoyed a few lunchtime romps at felonious speeds with them. That got me some cred.

            For field ops support the lifers and officers were gold. They fit in with the 90:90 programs (90 days in theater, then 90 days in CONUS on extended paid leave). That requires “tactical” knowledge as opposed to being heavily “technical”. No one else had that situational awareness. They did well in sales for the same reason.

            The career ex-mil guys were valuable in helping the techies understand how the end-user operates and having one or a few during the requirements definition phase and early design reviews was essentially mandatory IMO.

            Just my experience in defense electronics…others mileage may vary. It wasn’t easy to write this as I am “standing in judgment” of others and strived to be even-handed. My apologies if I fell short.

          • 0 avatar
            HotPotato

            Is it really true that “tax reasons” are making retired layabouts of ex-military folks at age 38? If so, then tax laws sorely need editing.

          • 0 avatar
            highdesertcat

            EGSE, thank you very much for taking the time to write that.

            A magnificent read and educational for people like me who had no idea that retired military guys (and gals) had become so difficult in adapting to the civilian work place.

            And you didn’t fall short. You outlined the problems you had succinctly and precisely. Most illuminating.

            With your permission I like to send a copy of your comment to TROA, the NCOA and USAA in order to help vets adapt to the changing workplace.

            My apologies for the delayed response. I was in El Paso, TX all day, working on my daughter’s house.

          • 0 avatar
            highdesertcat

            HotPotato, retired military guys (and gals) I talked to at official gatherings have told me that in order for them to accept a job offer after they retire

            1) it’s got to be in a place where they want to live (like Silicon Valley is out for a number of reasons)

            2) the job has to pay them a great deal of money in order to offset the tax bite that will be taken out of their retired pay and

            3) it’s got to be a job that is something they would love doing, even if for free.

            Federal Agencies and other employers often contact, write or email retirees/separatees to gauge their interest in various job openings that are in line with their skills, experience and training.

            Hence, State and Local Fire Departments, Police agencies, medical establishments go after retirees with certain skills. That’s how my #2 son became a CHiP when he left the Corps, and my #3 son became a Border Patrol Supervisory agent.

            A little closer to home, all three of my sons, and other people I know were contacted by their future employers prior to their separation from service.

            My grandson was contacted by Homeland Security while he was working Civil Service at Miramar MCAS after his separation from service.

            And those are NOT isolated instances.

            But this is not the forum to discuss such topics except to say, if a person is a keeper, employers will seek them out and recruit them.

            But a lot of them just kick back with the philosophy of keeping all their time as their own, and all their retirement pay.

            Seriously! Signing bonuses are not uncommon for retired military who come on board with Federal Contractors, either.

            And we’re talking Big Bucks there.

          • 0 avatar
            Art Vandelay

            As a military retiree only a few years past the age of 38, there is no way I would take the pay cut from my current position to screw cars together. Additionally I do not know a single retiree that did not return to the workforce following their retirement and that list includes a gentleman that retired with three stars on his chest. He would be the only one that didn’t need the money though.

            Yes, I could live in my retirement (Chief Warrant Officer 3), but why in God’s name would I want to live like that. It pays my mortgage though. That’s how most military retirees I know look at it… A free house and alot fewer years until I can actually retire

            Military employment post retirement depends wholly on your job (except for the 3 star…people want him for connections). Mine was timed perfectly as cyber defense suddenly became a thing. Had I retired as a Combat Engineer which I entered as, my prospects would be different. You really can’t look at that group as a monolythic block…their skillsets vary widely.

          • 0 avatar
            el scotto

            HDC, you’re retired AF and should know better. Everyone who has ever served in the military knew the E-6/E-7 and O-4/O-5 who were Retried On Active Duty aka ROADkill. They’re not stellar candidates for their next career or recommendations. Also, most retired military guys are on wife two or wife three with child support payments going to at least one ex-wife. Yeah, hey have to find a job after retirement. Also, to be taken seriously, don’t wear your Bates military shoes or try to convince someone how hard you had it in the Air Force.

          • 0 avatar
            highdesertcat

            Art & El Scotto, I agree that the financial needs of retired military people vary widely.

            But there ARE a huge number of retired military people who choose NOT to go back to work for someone or some company. Some become self-employed in a variety of occupations, like Insurance Agent, CPA, Attorney, Contractor/Handy Man, Caregiver, Home Nurse, the list is long and we’ve got a number of them in my region.

            Commissioned or non-Commissioned, and I’ve seen both, many of them are content to let their current wife bring home the bacon, while they kick back.

            A number of them hang out at the Golf Courses each day. And at the local McDonald’s, Burger King, etc. for all the freebies.

            I chose to become self-employed after my retirement in 1985, refurbishing, rebuilding and upgrading rental properties for the in-laws’ real estate business.

            That’s also how I became so deeply involved in the car business, and a regular reader on Robert Farago’s ttac, when my four brothers and their partners drafted me in 1985 to do the analysis of the bid’ness.

          • 0 avatar
            EGSE

            @HDC

            No problems with using it as you like. After reading what you wrote @ 05/12 12:01 it might make more sense to have that be the main body, edit what I wrote and paste what’s left into your doc. Yours talks about good job fits for those about to transition and that’s more useful IMHO. My posting was about a narrow slice of the greater world. Some of the fresh-outs (recent collage grads) could be rainbow-farting prima donnas and culture clashes with people from a different background were inevitable. One of the reasons I went independent.

          • 0 avatar
            highdesertcat

            EGSE, Thank you kindly. Done and done.

            My apologies again for the delayed response this time.

            I was out buying a new off-road motorcycle today to put on the cargo carrier of my motorhome, kinda like a lifeboat, just in case I should need an alternate mode of transportation, for whatever reason like grocery-getting while at the campground or in case of breakdown in the middle of nowhere.

  • avatar

    My guess is that USPS will choose Chinese company to build vans, well because it is cheaper and has a Government backing. Chinese normally win contracts. E.g. SF Bay bridge was built by/from Chinese steel. It turned out to be defective and requires expensive maintenance, repairs and replacements but who cares – it was cheaper to build this way. Repairs and maintenance is a different expenditure.

  • avatar
    ToolGuy

    The rattle-can steel wheels really optimize the appearance of this vehicle. /S

    The ‘light bar’ up top – is it intended to illuminate the road surface ahead of the vehicle? Because I’m not sure light beams bend that much here on earth.

  • avatar
    DeadWeight

    The Trumptardian Guard will eat this up until the whole diversionary fake news falls flat, just like the Foxconn Wisconsin MASSIVE, NEW FACTORY, heralded by King Trumptard, and Trumptard minion Scott Walker, and then they will pretend the whole sham never took place, ignoring it as if it never was announced…

    • 0 avatar
      highdesertcat

      #DoubleStandard

    • 0 avatar
      TotalNonStopCars

      A liberal and a transgender walk into a CO school…stop me if youve heard this one…

    • 0 avatar
      ect

      Here is another (and more realistic) hypothesis. A start-up on the verge of failure is bidding on a contract it can’t possibly fulfill, and (since it can’t possibly fulfill it and is up against far more qualified bidders) has no chance at all of winning.

      So, it boldly approaches GM to say it’s interested in acquiring Lordstown as a manufacturing site for the vehicles it hopes it might build for USPS, and makes sure this news reaches people within the Trump administration.

      So, Trump now gets all excited, as this would save him major political embarrassment in a swing state, and loudly trumpets the deal as if it were an accomplished fact. Which means his people will bring ENORMOUS pressure on USPS to grant the contract to a company that is totally unqualified to fulfill it, which in turn will enable said failing startup to get financing to keep itself afloat as it builds up to actually try to fulfill the contract – which it won’t be able to, but which failure will be after the 2020 election.

      In fact, Workhorse won’t be allowed to keep the contract, even if it is awarded to them. All of those better-qualified bidders will certainly appeal the award, and Workhouse just doesn’t have the horsepower to last out the appeal process. (pun fully intended). But of course, that process will outlast the 2020 election, which is the only thing that Trump cares about.

  • avatar

    Workhorse vs Deadhorse.

    Buickman
    Founder
    GeneralWatch.com

  • avatar
    WildcatMatt

    After recently reading PUNCHING OUT, I’m curious about the status of the various presses and robots in Lordstown.

    I assume GM wouldn’t sell the specific dies with the plant, but if the right package was put together that would include presses and stamping units, there could be some interesting possibilities especially if it’s purchased by a consortium.

    Lease part of the factory to Tesla, perhaps?

  • avatar
    James Charles

    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.

  • avatar

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


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