Lordstown Endurance Pickup revealed (post #26)
11-08-19, 11:38 PM
#1
Lordstown Endurance Pickup revealed (post #26)
High hopes it will become 'a manufacturing hub for electrification'
General Motors confirmed on Thursday it has sold its shuttered Lordstown Assembly plant in Ohio to a startup that has an ambitious plan to begin building electric pickup trucks by the end of 2020.
Lordstown Motors Corp, which is 10% owned by Workhorse Group, has retained Ohio investment bank Brown Gibbons Lang & Co and is working to raise additional capital, Lordstown Motors CEO Steve Burns said in an interview. Workhorse shares closed up 27% on the news.
The fate of the northeastern Ohio plant has become a lighting rod in the 2020 presidential election after GM announced in November 2018 its planned closure, drawing condemnation from President Donald Trump and many U.S. lawmakers. The fate of the plant, which ended operations in March, remained uncertain until the Detroit automaker reached a new contract with the United Auto Workers union last month.
The company has been working on the engineering of the new truck, called Endurance, and hired Rich Schmidt, a former director of manufacturing at Tesla Inc, as chief production officer.
GM said Thursday it believes "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."
GM is not investing in the venture. The purchase price was not disclosed, but sources said it was similar to EV startup Rivian Automotive's 2017 acquisition of a former Mitsubishi plant in Normal, Illinois, for $16 million. Burns said the company got a "great deal" after 10 months of talks with GM.
Burns, the former Workhorse CEO, said the company has been working on engineering the new truck for the last six months but acknowledged the timetable is "aggressive." However, he said the company has the advantage that the Ohio plant is "fully intact, still warm."
Burns hopes to have pre-production prototypes coming off the assembly line by April and start production by November 2020 with 400 hourly workers to start. In addition to the truck for the public, Burns hopes to land a lucrative contract to build trucks for the U.S. Postal Service. But several other companies, such as Mahindra, are in the running.
"When you live in a factory area and the factory closes, there is a lot of pain there," Burns said, saying Lordstown/Workhorse want to build a company for the long term. "This should be the electric epicenter of the Midwest if you do it right."
Burns declined to say how much money the company has raised but said it has raised enough to hire the management team and engineers and acquire the factory. He said "the serious" effort to raise additional financing began on Thursday, and he is looking for new strategic investors.
The fate of the 6.2-million-square-foot Lordstown plant has been a major focus for Trump, who in June 2017 advised workers in nearby Youngstown, Ohio, that factory jobs were not leaving. “Don’t move, don’t sell your house,” he said.
GM last month said it plans an electric battery cell plant near the Lordstown complex that could eventually employ 1,000 people. Sources have said the battery plant would be a joint venture, where the workers are represented by the UAW and earn in the range of $15 to $17 an hour.
The sprawling Lordstown plant at one time employed more than 4,500 workers, but was down to 1,400 workers on one shift by the time GM announced the plant was closing.
Lordstown Motors Corp, which is 10% owned by Workhorse Group, has retained Ohio investment bank Brown Gibbons Lang & Co and is working to raise additional capital, Lordstown Motors CEO Steve Burns said in an interview. Workhorse shares closed up 27% on the news.
The fate of the northeastern Ohio plant has become a lighting rod in the 2020 presidential election after GM announced in November 2018 its planned closure, drawing condemnation from President Donald Trump and many U.S. lawmakers. The fate of the plant, which ended operations in March, remained uncertain until the Detroit automaker reached a new contract with the United Auto Workers union last month.
The company has been working on the engineering of the new truck, called Endurance, and hired Rich Schmidt, a former director of manufacturing at Tesla Inc, as chief production officer.
GM said Thursday it believes "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."
GM is not investing in the venture. The purchase price was not disclosed, but sources said it was similar to EV startup Rivian Automotive's 2017 acquisition of a former Mitsubishi plant in Normal, Illinois, for $16 million. Burns said the company got a "great deal" after 10 months of talks with GM.
Burns, the former Workhorse CEO, said the company has been working on engineering the new truck for the last six months but acknowledged the timetable is "aggressive." However, he said the company has the advantage that the Ohio plant is "fully intact, still warm."
Burns hopes to have pre-production prototypes coming off the assembly line by April and start production by November 2020 with 400 hourly workers to start. In addition to the truck for the public, Burns hopes to land a lucrative contract to build trucks for the U.S. Postal Service. But several other companies, such as Mahindra, are in the running.
"When you live in a factory area and the factory closes, there is a lot of pain there," Burns said, saying Lordstown/Workhorse want to build a company for the long term. "This should be the electric epicenter of the Midwest if you do it right."
Burns declined to say how much money the company has raised but said it has raised enough to hire the management team and engineers and acquire the factory. He said "the serious" effort to raise additional financing began on Thursday, and he is looking for new strategic investors.
The fate of the 6.2-million-square-foot Lordstown plant has been a major focus for Trump, who in June 2017 advised workers in nearby Youngstown, Ohio, that factory jobs were not leaving. “Don’t move, don’t sell your house,” he said.
GM last month said it plans an electric battery cell plant near the Lordstown complex that could eventually employ 1,000 people. Sources have said the battery plant would be a joint venture, where the workers are represented by the UAW and earn in the range of $15 to $17 an hour.
The sprawling Lordstown plant at one time employed more than 4,500 workers, but was down to 1,400 workers on one shift by the time GM announced the plant was closing.
11-09-19, 08:07 AM
#3
Lexus Fanatic
11-09-19, 08:09 AM
#4
Lexus Fanatic
11-09-19, 08:22 AM
#5
Lexus Fanatic
11-09-19, 08:42 AM
#6
Lexus Fanatic
If there were no overcapacity issues, this plant would sell for more. And the land is not worth as much, if GM could they would rather sell the land to developers for houses etc etc. Everything inside the plant will be striped and shipped to Mexico and China for car production in those cheaper areas.
11-09-19, 09:33 AM
#7
Lexus Fanatic
For comparison Tesla paid $50 million for the former GM/Toyota plant which included 200 acres of land. I don't know if this is good or bad.
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11-09-19, 10:33 AM
#8
Lexus Fanatic
It is certainly a good deal for Tesla at the time. Toyota auctioned off the plant, and sold some of the interior equiment, but not much.
11-09-19, 11:47 AM
#9
Lexus Fanatic
If there were no overcapacity issues, this plant would sell for more. And the land is not worth as much, if GM could they would rather sell the land to developers for houses etc etc. Everything inside the plant will be striped and shipped to Mexico and China for car production in those cheaper areas.
11-09-19, 11:53 AM
#10
Lexus Fanatic
11-09-19, 12:08 PM
#11
Lexus Fanatic
Probably. And, though I won't expound on the details because it might make the thread too political, I think both the U.S. Congress and the Canadian Parliament (and possibly Trump and Trudeau) would step in with economic penalties against GM....more so than what are already in effect now, such as tariffs.
GM (and, to a lesser extent, Ford) management have to realize that this is very, very serious business...I can't emphasize how much. The Happy-Go-Lucky days of simply outsourcing everything to the lowest bidder, all over the globe, are over. That is the wave of the past, not the future. Operating under the American and Canadian flags is actually going to mean something again.
11-09-19, 03:35 PM
#13
Lexus Fanatic
Wildcat strikes can, and occasionally do, happen in any unionized industry, except in the government, where strikes and lockouts are forbidden. They are notorious in coal mining.
11-10-19, 08:28 AM
#14
Lexus Fanatic
This is the free market at work. This is a great thing for the community around the shuttered plant, somebody else is going to come in and use it to build something else and employ people, and its a great thing for GM because they turned something that was just costing them money into some liquid capital.
Now we're complaining $20M wasnt enough for GM to charge?!? Unreal.
Now we're complaining $20M wasnt enough for GM to charge?!? Unreal.
11-10-19, 02:23 PM
#15
Lexus Fanatic
iTrader: (20)
PT Barnum’s saying “there’s a sucker born every minute” generally applies to the BUYER, not the SELLER. But you seem to be saying gm sold the plant for too little, making them a sucker. I’d say they were lucky to sell that hulking industrial age museum at all. 
Because coal miners are in such a good position to strike these days. 