GM News: Lordstown Deal In Jeopardy

[Drew Dowdell]

Back in early May, we reported that electric truck maker Workhorse was in talks with General Motors to buy the shuttered Lordstown Assembly plant that formerly built the Chevrolet Cruze.  The plan seemed founded more on hopes and dreams rather than actual financial reality.  Workhorse's only model, the W-15 is a truck with an 80 mile range and a built in range extender, has not exactly been climbing the sales charts.   In fact, the company booked only $6,000 in sales in the 2nd quarter of 2019, roughly $70 per day.  Following that report, the company's stock plunged 35%. Deliveries of the truck are currently on hold and will resume in the 4th quarter this year. There is currently a $70 Million backlog of orders to fill.

Hopes of a solution for Lordstown coming from Workhorse are dim, but there is one thing that could save the deal: a $6.3 Billion contract from the US Postal Service to build the next generation of mail trucks, though Tom Colton, a spokesman for Workhorse said that the Lordstown deal isn't contingent on the contract from the USPS. 

Under the proposed Lordstown deal, a new company would be formed called Lordstown Motors Corp. which would license the Workhorse technology to produce vehicles based on the W-15 model.  Workhorse itself would own a minority stake in the company. 

The UAW is still in talks with General Motors to reopen the plant and assign new product to it.

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[riviera74]

OK, why can't they just buy the Lordstown plant after the UAW/GM contract expires on September 15th?

[Drew Dowdell]

13 minutes ago, riviera74 said:

OK, why can't they just buy the Lordstown plant after the UAW/GM contract expires on September 15th?

Money. Workhorse has none.

[David]

Only way I see this reopening under GM is if they truly can deliver on the right product with the right power train and have it demand 3 shifts a day production to full fill.

Right now I do not see that happening.

[smk4565]

I make over $70 per day, maybe I can buy the factory.

[FAPTurbo]

3 hours ago, smk4565 said:

I make over $70 per day, maybe I can buy the factory.

wait for it to be on the auction block for a buck.

Edited August 7, 2019 by FAPTurbo

[A Horse With No Name]

12 hours ago, FAPTurbo said:

wait for it to be on the auction block for a buck.

At this point, given the asbestos, chemical waste and cost of demolition, buying it for a buck would let GM and the state of Ohio off of the hook for the eventual cleanup and removal costs.

17 hours ago, dfelt said:

Only way I see this reopening under GM is if they truly can deliver on the right product with the right power train and have it demand 3 shifts a day production to full fill.

Right now I do not see that happening.

Maybe if string theory is true and a parallel universe exists...even then, sketchy at best.

 

19 hours ago, riviera74 said:

OK, why can't they just buy the Lordstown plant after the UAW/GM contract expires on September 15th?

They will have zero use for it as they will sell nearly zero products.