GM in talks to sell shuttered factory in Lordstown, Ohio
DETROIT — General Motors is negotiating the sale of its shuttered factory in Lordstown, Ohio, to a company that builds electric trucks.
The company confirmed Wednesday that it’s in talks with Workhorse Group to sell the huge facility, and also announced plans to invest $700 million in three Ohio factories to create 450 additional jobs.
The potential sale, first announced on Twitter by President Donald Trump, could preserve some jobs at the sprawling plant 60 miles east of Cleveland. But it also dashes any hope that GM would reopen the factory where until March, it had built cars for more than five decades.
Workhorse Group, led by Workhorse founder Steve Burns, would acquire the facility and would hold a minority stake in a new venture, a GM statement said. But it was unclear who would own the rest.
“This potential agreement creates a positive outcome for all parties involved and will help solidify the leadership of Workhorse’s role in the EV community,” said CEO Duane Hughes.
The company would build a commercial electric pickup truck if it buys the facility “blending Workhorse’s technology with Lordstown’s manufacturing expertise,” Burns said in the statement.
Should the project go forward, initial job numbers would be in the hundreds, said Ohio Gov. Mike DeWine, moments after fielding a call from GM CEO Mary Barra about the proposal. That number could rise to 3,000 over several years if Workhorse were to win a contract with the U.S. Postal Service, DeWine said.
“We have people who are I would say knowledgeable about the negotiations who have told us that. That would be one of the goals of the company as they grow their business — to get a contract with the post office,” DeWine said.
DeWine said he welcomed the news but said a lot depends on upcoming UAW negotiations and the union’s reaction.
“This is certainly better than the plant being idle and not being used,” DeWine said. “And it would appear that with this company that there is potential for growth and maybe significant potential growth, which is what we want.”
Lordstown Mayor Arno Hill said he’s hopeful but still waiting to hear more details, including how many people might be employed. “It’s definitely better than having 6 million square foot building sitting empty,” he said.
But news of the pending sale was greeted gloomily by workers in Lordstown who were hoping that GM would reopen the factory that stopped producing the Chevrolet Cruze compact car in March.
Tim O’Hara, vice president of the United Auto Workers union local at the 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.”
Lordstown had about 1,400 hourly workers on one shift at the time the plant stopped production. But hundreds of others had been laid off earlier as GM cut two shifts to deal with slumping demand for the Cruze.
Only a skeleton crew remains on duty at the plant scrapping old parts, O’Hara said.
In a statement, GM said the 450 jobs would be added at plants in Toledo, the Cleveland suburb of Parma and the Dayton suburb of Moraine.
Trump happily tweeted the news after a conversation with Barra, calling the announcement “great news for Ohio.” He had campaigned on bringing factory jobs back to the state, a key battleground in his 2020 re-election campaign, and was critical of GM’s plans to close the plant as part of a larger restructuring effort.
Workhorse has been involved in developing both electric trucks and drones.
CEO Hughes said Tuesday the Cincinnati company is making progress in the transition from development, to the production of electric vehicles.
“We remain focused on our ‘Trucks First’ initiative, which has enabled us to make significant advances in all phases of the manufacturing process,” Hughes said.
The company is on target, he said, to begin delivering its new electric vans at the end of this year.
Workhorse reported that its first quarter sales for this year were at $364,000, down from $560,000 for the quarter in 2018.
It also reported having $2.8 million in cash and short-term investments.
The announcement came just after GM and the Canadian auto workers union reached a deal to save 300 jobs at an Ontario factory that is slated to close by the end of this year. They’ll work in a parts-stamping operation that will continue to make components for GM vehicles as the company seeks other business.
But the remainder of the 2,600 workers at the plant in Oshawa, near Toronto, are still scheduled to be laid off.