President Donald Trump tweeted Wednesday and General Motors confirmed that the automaker is trying to sell its recently shuttered Lordstown, Ohio, factory to Workhorse Group, an electric vehicle company with fewer than 100 employees.
GM said it is "in discussions" with Workhorse. Representatives of both companies expressed optimism that they can complete a deal, although they stressed that talks are in early stages and that any agreement would have to be approved by the United Automobile Workers union.
The companies were more guarded than Trump, who said in a tweet earlier Wednesday: "GREAT NEWS FOR OHIO! 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..."
But the UAW indicated that it would continue to push for GM to bring a new vehicle to Lordstown.
"The UAW's position is unequivocal: General Motors should assign a product to the Lordstown facility and continue operating it," said UAW Vice President Terry Dittes in a statement.
Trump has frequently weighed in on company decisions. The president lashed out at GM repeatedly after the car maker began laying off 4,500 employees at Lordstown, the factory that made the Chevy Cruze sedan, urging the company to reopen the facility or sell it to another company. The final GM Lordstown factory workers were cut in March.
Trump promised to bring back blue-collar jobs to the Rust Belt, and the closing of the Lordstown factory, located in a county that swung from blue to red in the last presidential election, has been a sore spot.
GM announced in March plans to invest an additional $1.4 billion in the United States shortly after the final Lordstown factory layoffs and a barrage of critical tweets and remarks from Trump. The company is now committing half of that new investment to Ohio, although it won't go to Lordstown.
Workhorse makes electric commercial vehicles and is based in Loveland, Ohio. The company had 99 full-time employees and seven part-time employees at the end of last year, according to its annual report.
Workhorse Chief Executive Officer Duane Hughes said in a statement that his company plans to build a "commercial electric pickup" at the Lordstown facility.
A Workhorse spokesman said the company would like to hire "a couple hundred" workers and that the plan at the moment is for a separate entity to own the Lordstown facility and for Workhorse to have a minority stake in it.
Workhorse currently has less than 300,000 square feet of manufacturing space. The Lordstown facility is more than 6 million square feet, giving a deal the potential for a massive increase in the company's capacity, although questions remain about how Workhorse can afford it. The company reported a $36.5 million loss last year.
"There has to be some big order coming for Workhorse in order for this to make sense. Workhorse made only $21,000 in sales in the fourth quarter of last year," said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research.
Workhorse is one of five finalists the United States Postal Service is having build prototype delivery vehicles. The USPS would like to replace 180,000 vehicles, and the contract could be worth billions.
Tim O'Hara, vice president of the UAW local at the GM plant, said workers were hoping the union could negotiate a new product for Lordstown, allowing them to stay in the area and continue careers with GM. Many will be forced to transfer in order to preserve seniority and pension eligibility, O'Hara said.
"I guess that means they're done in Lordstown," O'Hara said of GM. "Anybody that wants to continue working for them is going to have to transfer out."
GM workers earned about $30 per hour with good benefits.
Workhorse said it would be open to employing UAW workers in Lordstown, although it did not make a guarantee.
The UAW and GM are to negotiate a new contract later this year, and the fate of the Lordstown plant is likely to be part of that decision.
Information for this article was contributed by Heather Long and Damian Paletta of The Washington Post and by Tom Krisher and John Seewer of The Associated Press.
Business on 05/09/2019