On a visit to Ohio on Tuesday, Vice President Mike Pence announced that Workhorse Group has secured financing to buy GM's factory in Lordstown, Ohio, to build electric trucks.
After General Motors idled the small-car factory in March, Lordstown has become a hot-button issue for President Trump, who built much of his electoral strategy on bringing back manufacturing to the Midwest.
Workhorse is a small, Cincinnati-based company that employs 98 workers and has orders to convert 1,000 box vans to electric power for UPS. Some in the automotive community have been skeptical of the company's ability to purchase the factory at which GM once employed more than 12,000 people. The Lordstown plant built 184,751 Chevrolet Cruze sedans in 2018.
Workhorse is also one of three finalists for a U.S. Postal Service contract to replace its fleet of existing mail trucks with cleaner hybrid delivery vehicles.
The Lordstown factory was idled after GM decided last November to shut down production of the Cruze, along with several other passenger-car models. Those models included the Chevrolet Volt plug-in hybrid, which was produced at a different plant, in Michigan.
On Tuesday, Pence said, "Workhorse, I learned just this week, secured the financing to move forward to keep jobs in that community and we’re going to continue to look for ways to support that," according to ABC affiliate News5 in Cleveland.
Workhorse has not issued any statements about such funding since Pence made the announcement. The company announced in June that it had raised $25 million in stock offerings in May and June to further its development of the N-Gen delivery van for UPS. UPS has confirmed initial production of 50 N-Gen vans. The Business-Journal Daily, in Ohio estimates that Workhorse would need $300 million to buy the Lordstown factory.
Workhorse W-15 extended-range electric pickup truck
Local Ohio leaders said they think Pence may have confused the new $25 million funding round with money to buy the Lordstwon factory. Democratic state Senator Sean O'Brien and Mike Rulli are paying a visit to Workhorse on Friday to learn more. Referring to Pence, O'Brien told local news station WKBN: "I think he got mixed up on some money that was released last month. I talked with General Motors about it, tried to find out. They have indicated that they have not heard anything,”
After President Trump first announced the Workhorse deal, company founder Steve Burns said, "The first vehicle we would plan to build if we were to purchase the Lordstown complex would be a commercial electric pickup, blending Workhorse’s technology with Lordstown’s manufacturing expertise."
Workhorse's plug-in hybrid pickup has an 80 mile electric range and a small gasoline range-extender. The company says it has taken $1,000 deposits for the truck from 1,000 customers, but it has since focused on other projects including a drone-like hybrid helicopter called the SureFly.
Green Car Reports reached out to GM for clarification, and the automaker reiterated there is no sale yet or financing for the actual sale, but that the initial $25 million of financing secured by Workhorse is going to fund some needed research and development and start that company on its way clearing a backlog of commercial truck deliveries. That's a necessary step prior to the start of investor outreach for the new entity that’s due to be created around the purchase of the Lordstown property and Workhorse’s manufacturing plans.
“There’s been a lot of progress,” reported GM spokesman Jim Cain. “Anything that makes Workhorse stronger, makes them stronger in the new company,” he said, noting that the new effort won’t be formed until the completion of due diligence with the Lordstown property, including its contents, equipment, and environmental issues.
This piece has been updated versus its originally published version to update the number of peak GM employees at Lordstown and to add clarifying statements from GM.