GM Sells Embroiled Lordstown Plant To EV Startup
The Lordstown, Ohio, GM plant that was at the heart of the recent month-long UAW strike has been sold. Lordstown Motors Corp. has purchased the former GM facility. The plant was a large part of the UAW strike this summer. The UAW was ultimately unsuccessful in getting GM to assign another vehicle for production there. The Plant has been making GM products since 1966.
It was only a matter of time after the labor contract was ratified without Lordstown being included. It became entangled in US politics when President Trump condemned GM for closing the plant. He went to Ohio telling people at a rally not to sell their homes because he would save the plant.
GM, Lordstown Motors And Workhorse
LMC has discussed taking over the plant to build plug-in pickups. It is also affiliated with Workhorse Group which owns 10% of LMC. Workhorse is waiting on a proposal submitted to the US Postal Service to build plug-in mail trucks. So there are two companies with common goals, common intellectual property for electric drive systems, and even company heads.
If it is able to raise enough capital to convert the plant LMC has an electric model it calls “Endurance” it wants to build for fleet truck markets. If Workhorse wins the mail truck contract it may build them at the Lordstown plant. Workhorse is not obligated to do so, however.
The LMC “Endurance”
The Endurance is planned for four electric motors-one at each wheel, for an all-wheel-drive system. It would be built with fewer components than a conventional pickup so it would conceivably cost less to repair. It will also have the ability to use its power source for running power equipment at job sites and other uses.
Steve Burns, CEO of LMC, says it has the money to build the Endurance. But he needs to raise more money to finance continued development, fulfill crash and safety tests, get approval to produce the trucks, and configure the plant to build it. So, it appears the Lordstown Motors dream is anything but a reality.
Though details haven’t been revealed, it is believed LMC bought the facility from GM for around $16 million. Burns calls it, “a great deal.” Burns has said he plans to have prototypes running down the assembly line by April 2020, with production starting in November. It is estimated LMC will need 400 workers.
The UAW fought GM over the Lordstown sale because of the uncertainties surrounding the startup. It is not convinced there is a long-range future for electric vehicles and points to numerous EV startups that have failed. Even Tesla has financial hiccups.
LMC Hires industry Veterans
Burns is trying to hire top industry leaders to help transition the company to production. Veterans from GM, Ford, and Karma; the former Fisker Car Company that went bankrupt soon after entering into vehicle production, are now on board. LMC’s Chief Production Officer is Rick Schmidt. He worked for Tesla for over three years as its manufacturing director.
So, while the connections between Workhorse and Lordstown are not binding, and in spite of needing a lot more upfront cash before it can begin production, a lot of the pieces for continuing development are in place.
As for Workhorse, it has 6,000 pre-existing orders for its W-15 truck that it has an agreement with Lordstown to produce. But Workhorse only showed $6,000 of revenue for the third quarter of 2019.
Expect to see fundraising from both companies in the coming months. Let’s hope future production at the fabled plant is finally realized.
