The Lordstown facility is huge – imagine an assembly plant covering 6.2 million square feet, which is almost twice the size of the Pentagon. General Motors opened the plant in 1966 and closed it earlier this year.
The Lordstown plant, where the Chevy Cruze was made, became a political sticking point for the Trump Administration when it was closed, and the president denounced the automaker and threatened to take action against it. Then came the contract talks between GM and the United Auto Workers union.
The UAW wanted GM to move production from Mexico back to the U.S. to keep the Lordstown plant open. GM’s refusal to do so was a major factor in the decision by the union to go on strike. But in the end, GM held firm and refused to revive the plant with its own production, says CNN News.
But the bickering over the fate of the Lordstown plant is “all water under the bridge” now. Workhorse Group Inc, an American technology company focused on providing sustainable and cost-effective electric mobility solutions to the transportation sector, announced on November 7 they had entered into an intellectual property licensing agreement (PLA) with Lordstown Motors Corp (LMC).
Workhorse is an American original equipment manufacturer, that designs and builds high-performance battery-electric vehicles including trucks and aircraft. Workhorse also develops cloud-based, real-time telematics performance monitoring systems.
Lordstown Motors is a private entity founded by former Workhorse CEO Steve Burns. LMC was formed expressly to save the shuttered Ohio facility – with the intent of manufacturing electric trucks.
“This long-term partnership allows Workhorse to benefit by both monetizing our existing technology and participating in the upside potential of this new venture without prohibitively diluting our existing shareholders,” said Company CEO Duane Hughes.
Lordstown Motors Corp. CEO Steve Burns added, “Workhorse is the right technology partner for LMC, and this agreement ensures that both parties are positioned, and incentivized, to succeed. Under this structure, both Workhorse and LMC stand to benefit by blending Workhorse’s technology with the production capacity of the Lordstown Assembly Plant. We, along with Workhorse, remain dedicated to keeping vehicle production in Lordstown. Now, with LMC’s acquiring of the Lordstown, Ohio factory, it is time to begin executing on our plan.”
Burns, who also founded Workhorse and was CEO until February, is counting on Workhorse technology to build an electric pickup called Endurance for fleet customers.
President Trump started bragging about the “possible” sale of the GM plant to Workhorse back in May this year after he had a conversation with GM CEO Mary Barra. However, there is some concern over Trump’s “great news for Ohio,” and Workhorse Group appearing to hemorrhage money.
Workhorse’s second-quarter earnings report this year didn’t reveal anything positive. The company’s sales only totaled about $6,000 during the quarter, reports Bloomberg. Workhorse stock fell, Bloomberg added, dropping 30 percent and lowering market value to under $200 million.
Workhorse posted sales for the third quarter of 2019 of $4,000, down from $11,000 in the third quarter of 2018. The decrease in sales was primarily due to a decrease in volume of trucks delivered partially offset by improved pricing in 2019, said CEO Duane Hughes.
Net loss in the third quarter was $11.5 million, compared with a net loss of $5.5 million in the third quarter of 2018. As of September 30, 2019, the company had cash, cash equivalents and short-term investments of $9.3 million compared to $1.5 million as of December 31, 2018.
