General Motors is in talks to sell the Lordstown, Ohio, plant that it closed earlier this year. It is discussing a sale with Workhorse, which would use the plant to build electric trucks.
GM announced plans in November to close Lordstown, along with three other US plants and one in Canada, as it sought to cut costs and free up cash for development of next generation electric and self-driving vehicles.
Tom Colton, the head investor relations for Workhorse (WKHS), said the talks are still in a preliminary stage and the company could not give any target for how many workers it would employ if it bought Lordstown, or when those jobs might start.
But the United Autoworkers union, which represents the hourly workers who used to work at the Lordstown plant, issued a statement reiterating its position that it doesn’t want the plant sold. The UAW said it will continue to push to have GM reopen the plant itself.
“The UAW’s position is unequivocal: General Motors should assign a product to the Lordstown facility and continue operating it,” the union said in a statement.
It pointed out that it had filed a federal lawsuit in February to try to get GM to keep the jobs at the plant. In the upcoming labor negotiations, the UAW plans to push GM to build a new vehicle there. Those talks start in July.
GM has a history of closing a plant when it stops producing the vehicle that had been built there, and reopening it years later once it has a new product it is looking for a home to build. It has done that with plants in Michigan and Tennessee most recently.
The jobs that an upstart vehicle maker such as Workhorse probably won’t come with the same pay and benefits as a union-represented job at GM.
Colton said it was too soon for Workhorse to say how many people it would hire, when it would hire them or whom they would hire.
The company said it would plan to use the Lordstown plant to build an electric pickup truck. Workhorse said it would not fully own the Lordstown plant if GM sells it. Colton would not name who would be the majority owner other than to say it would not be GM.
Although Lordstown appears not to be part of GM’s future, GM said it plans to invest $700 million in Ohio and hire 450 workers at three locations in the state.
But the plant closest to Lordstown, in Parma, is about an hour away from the closed plants. Another plant adding jobs in Toledo is 160 miles away, while a third in Moraine, is about 250 miles away. Although those jobs are closer than some of the jobs that laid-off Lordstown workers have been offered in Michigan and other states, they would still pose a challenge for those who can not relocate.
So far 729 hourly employees who were working at the plant at the time of its closure have accepted transfers to other GM plants; another 350 were eligible for retirement. The Lordstown plant had 1,600 hourly and salaried jobs at the time GM announced it would close.
Ohio Governor Mike DeWine said GM’s announcement was good news for Parma, Moraine and Toledo. But for Lordstown, he said “this is not yet the day to celebrate.” Eager for Workhorse to buy the plant, he said he would expect jobs at the plant to be “in the hundreds.”
“A lot has to happen,” he said. “The UAW obviously has to make a decision which way it wants to go in regards to this,” he said. He said for Workhorse to go forward with the purchase of Lordstown it would need to have the US Postal Service buy electric vehicles from the company. He said the state would push the USPS to give it the contract.
“We’re certainly not going to sit around and not try to make things happen,” he said.
Workhorse’s interest in buying the plant was first announced in a Wednesday morning tweet by President Donald Trump, who portrayed it as a done deal and hailed the move.
“With all the car companies coming back, and much more, THE USA IS BOOMING!,” he tweeted. He praised GM (GM) Chief Executive Mary Barra, who he said had informed him of the deal, which he said would be “subject to a UAW agreement etc.” Trump has been very critical of Barra and GM (GM) up until now.
GM said in a statement later Wednesday that it has yet to reach a deal.
“At this point I’m going to refrain from characterizing the state of the negotiations,” said GM spokesman Dan Flores. “We are in talks. The deal is not done. Clearly we’re very hopeful.”
Workhorse is switching from traditional trucks and vans to electric vehicles and will start producing electric delivery vans for United Parcel Service (UPS) later this year. That work is already underway in the company’s Union City, Indiana, factory and would not be relocated to Lordstown.
Correction: An earlier version of the story incorrectly reported that GM had finalized the deal to sell the plant.