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State senators are very optimistic companies will secure money to buy GM Lordstown
$300M to $500M needed to buy GM plant
LORDSTOWN
State Sens. Sean J. O’Brien and Michael Rulli said they are more optimistic than ever that Workhorse Group Inc. and an affiliated entity will be able to secure the funding needed to purchase the idled General Motors plant in Lordstown.
The two met Friday with the heads of Workhorse and the affiliated company at the former’s headquarters in Cincinnati.
When the senators asked if the companies had the funds to move ahead with its plans to manufacture all-electric utility vehicles in Lordstown, O’Brien of Bazetta, D-32nd, said he was told there is enough money to buy the building and for the business’ startup.
“I’m a lot more positive today than I was yesterday,” added Rulli of Salem, R-33rd. “They said they were moving forward with investing, but they weren’t specific. But the tenor is positive.”
Rulli said it would take $300 million to $500 million for the proposal to be realized.
The state senators spoke with Duane Hughes, Workhorse’s CEO, and Steve Burns, Workhorse’s former CEO who is now the head of the new affiliated entity and drove Workhorse’s prototype electric vehicles.
The Detroit News reported Friday that Burns said the new company would be called Lordstown Motors Corp.
“They’re moving forward with the project,” O’Brien said.
“They expect to negotiate a purchase of the building soon. The problem is the [United Auto Workers] contract hasn’t been concluded. But they believe the Lords-town facility is perfect.”
Without obtaining specifics, O’Brien said he was told the companies “received a significant amount of financing.”
O’Brien said there could be a major announcement from the companies in the next week or two.
During a Tuesday stop in Lancaster, Ohio, Vice President Mike Pence said in response to the GM Lordstown shutdown: “Workhorse, I learned, just this week, secured the financing to move forward to keep jobs in that community [Lordstown], and we’re going to continue to look for ways to support that.”
The two senators had scheduled this meeting a few months ago, well ahead of Pence’s Tuesday statement.
It turns out Pence was mistaken, according to various local officials and Jim Cain, a GM spokesman.
But Cain told The Vindicator Friday of the negotiations to sell GM Lordstown, “It’s a pretty complex transaction. Progress is being made.”
Pence was reacting to Workhorse obtaining $25 million from private investors for working capital and research and development.
That money isn’t “directly related to the sale” of the Lordstown plant, Cain said, but it’s good news that the company obtained the funding.
The Vindicator had previously reported in June on that money – $15 million obtained May 31 and $10 million June 6 – and that it wasn’t going toward the purchase of the Lordstown facility.
“Everything going on between the three parties is defining what would be sold and under what conditions,” he said.
GM in May confirmed a President Donald Trump tweet that it was in discussions with Workhorse, a Cincinnati-based electric vehicle company and an affiliated, newly formed entity to sell the Lordstown complex.
Cain didn’t want to put a timeline on when a potential sale could happen.
A Workhorse spokesman hasn’t returned calls seeking comment on the company.
GM ended production of the Chevrolet Cruze at its 53-year-old Lordstown plant in March, eliminating the last 1,600 jobs left at the facility that employed about 4,500 in 2017.