Electric Truckmaker Workhorse in Talks to Acquire Idled GM Plant in Ohio

Idled Lordstown General Motors plant in Ohio (Maddie McGarvey/Bloomberg News)

General Motors Co. is in talks to sell the Ohio car plant it idled earlier this year to electric truckmaker Workhorse Group Inc., a plan that won President Donald Trump’s praise despite the likelihood that the factory will employ far fewer workers.

The discussions with Workhorse, which makes plug-in pickups and all-electric delivery vans, and an affiliated new entity could bring “significant” production and assembly jobs to the Lordstown manufacturing complex, GM said in a statement May 8. The United Auto Workers union is skeptical, calling for the company to keep operating the plant.

Trump pre-empted the announcement by more than an hour, writing in a tweet May 8 that the sale to Workhorse will be subject to reaching an agreement with the UAW, which employed more than 1,400 hourly workers at the factory before GM scheduled its closure. He also shared the news early that GM will invest about $700 million and create 450 jobs in three other Ohio cities, and praised CEO Mary Barra.

Terry Dittes, a vice president of the UAW and director of its department that oversees negotiations with GM, said in a statement that the union’s position was “unequivocal.”

“General Motors should assign a product to the Lordstown facility and continue operating it,” Dittes said. The UAW sued GM in February, alleging the company breached its contract by announcing in November that three facilities in Ohio, Michigan and Maryland would stop production. The Detroit-based automaker has sought to have the suit dismissed.

GM has threatened to close several plants that build sedans because consumer demand has been shifting to sport utility vehicles for several years. About 70% of U.S. industry sales last year were trucks, SUVs and vans, and passenger cars’ share of the market continues to shrink.

GM produced its last Chevrolet Cruze compact car at the Lordstown factory in March and had said it didn’t have any future product planned for the 53-year-old facility. Union workers were livid that they agreed to make $118 million a year in annual concessions to save the plant in mid 2017, only to have the company effectively threaten to close it down a year and a half later.

Trump repeatedly bashed Barra and demanded that GM either reopen the Lordstown factory or sell it to a company that will. Democratic candidates to challenge for the presidency in 2020 also have criticized the carmaker, including former Vice President Joe Biden, whose father, grandfather and uncle all worked at a GM plant in Delaware that shut down in 2009.

Workhorse is among the companies competing for a contract worth as much as $6.3 billion to supply next-generation mail trucks to the U.S. Postal Service. CEO Duane Hughes, who left newspaper publisher Gannett Co. to join Workhorse in February, called the potential deal with GM “a positive outcome for all parties involved.”

The first vehicle Workhorse plans to build in Lordstown if an agreement is reached is a commercial electric pickup, Hughes said in a statement. Work to prepare the facility for production would begin immediately, he said.