GM completes sale of Lorsdtown plant to electric truck maker

GM completes sale of Lorsdtown plant to electric truck maker

Lordstown Motors Corp. hopes to make electric commercial pickups at site; deal terms not disclosed.

November 8, 2019

Cleveland, Ohio – General Motors officially sold the plant where it built its Chevy Cruze compact car to Lordstown Motors Corp. (LMC), a startup that hopes to build commercial electric vehicles (EVs) at the sprawling site in Northeast Ohio.

Neither side disclosed terms of the deal. GM announced plans to sell the plant to LMC, a company founded and run by Steve Burns, founder and former CEO of Workhorse Group, a Cincinnati, Ohio-area company that has been developing electric pickup technology. GM and Workhorse announced plans in May to sell the plant, but the company had to come to terms with the United Auto Workers (UAW) before any transaction could move forward.

LMC officials said production could begin as soon as late 2020.

Village of Lordstown Mayor Arno Hill said he’s cautiously optimistic that electric pickups could provide some of the jobs lost at the former small car plant.

“This could be something really big. Hopefully, Lordstown Motors is the start of something,” Hill said, adding that Ohio’s Mahoning Valley could become vital to U.S. electrified vehicle production.

While GM refused a UAW push to reopen Lordstown during recent contract talks (and the 6-week strike of the automaker by the union), company officials said they are considering EV work to the area.

“Projects planned for the Mahoning Valley include the opportunity to bring battery cell production to the area, which would create approximately 1,000 manufacturing jobs,” GM officials said.

Following the announcement of the sale’s completion, the automaker said, “GM is committed to future investment and job growth in Ohio, and we believe LMC’s plan to launch the Endurance electric pickup has the potential to create a significant number of jobs and help the Lordstown area grow into a manufacturing hub for electrification.”

Burns says LMC will license Workhorse’s technology, and Workhorse may convert 6,000 pre-orders for its prototype W-15 EV pickups into LMC Endurance models, giving the newly formed company work to perform immediately upon opening.

“We are committed to the people of Lordstown, we will locate our headquarters in the Lordstown plant, and we plan to build the Endurance pickup truck utilizing experienced workers who helped produce millions of vehicles in this very same plant,” LMC CEO Burns said.

Sale of the plant apparently included its equipment, an important part of the deal as GM invested heavily in Lordstown throughout the years. In 2009, at the height of the Great Recession in 2009, GM gutted and completely rebuilt the body shop and much of the assembly area at the facility – a $350 million project that included row-after-row of brand-new Fanuc welding robots.

“The quality and precision of the production robotics and equipment in the Lordstown facility is evident," said Rich Schmidt, chief production officer at Lordstown Motors and former director of manufacturing for Tesla Inc.

While the sale of the plant is an important step toward resuming production, there are lots of unknowns left – will LMC be able to finance the deal (Cleveland-area financial advisory firm Brown, Gibbons, Lang & Co. are working with them to do so)? Will GM take a stake in the new company? Will money-losing Workhorse be able to survive until fresh capital arrives? Will competitive EV pickups from Tesla, Rivian, Ford, and others limit the profitability of the future market?

Burns said he’s confident that the company can make the investment work.

“The people of Lordstown and the plant are and will be the history and future of the auto industry. When the first Endurance electric pickup rolls off that line, it will be a great day for Lordstown, Ohio, and America,” Burns said.

About the author: Robert Schoenberger is the editor of Today's Motor Vehicles and a contributor to Today's Medical Developments and Aerospace Manufacturing and Design. He has written about the automotive industry for more than 19 years at The Plain Dealer in Cleveland, Ohio; The Courier-Journal in Louisville, Kentucky; and The Clarion-Ledger in Jackson, Mississippi.