For just a second, the heart skipped a beat – because of this headline in the New York Times: “Electric truck company Workhorse gets needed cash infusion.”
Could it be that Cincinnati-based Workhorse had secured the financing needed for a start-up company to buy the huge auto-manufacturing complex in Lordstown abandoned by General Motors?
Unfortunately, hope did not spring eternal. Rather, hope sprung a leak.
The story in the Times under that headline said Workhorse had put together $25 million in new funding from investors to deliver on the company’s existing (emphasis added) backlog of orders.
“This funding provides Workhorse with sufficient capital to fully deliver on our existing backlog and will enable us to make significant strides in our strategic vision of being a leader in the electric last mile deliver space,” said Workhorse Chief Executive Duane Hughes. “We now have all necessary pieces in place to bridge Workhorse into full-scale N-Gen production and are looking forward to commencing the manufacturing process, in earnest, during the fourth quarter of this year.”
According to the website Carscoops, “Workhorse unveiled a prototype of its W-15 electric pickup truck a couple of years ago, but has yet to commence production. It is believed they will initially focus on building battery-powered lightweight vans for customers including UPS, DHL, and others before rolling out the W-15.”
So, here’s the bottom line: General Motors CEO Mary Barra was blowing smoke up the Valley’s you-know-what when she dramatically announced that Workhorse would buy the 53-year-old auto assembly complex in Lordstown if the United Auto Workers signed on.
The price tag for the sale, according to published reports: An estimated $300 million.
President Donald Trump, who had threatened GM with financial retribution if the company proceeded with the closing of four U.S. plants and displaced thousands of workers, also got in the act.
Trump, who didn’t do a thing after GM CEO Barra padlocked the Lordstown complex and said she would not be assigning another product to the Valley, pre-empted GM’s announcement by tweeting about the Workhorse plan.
However, it rang hollow because the proposal that has been put forth has more holes than Swiss cheese.
Earlier this month, Barra defended GM’s plan to sell its Lordstown plant to the electric start-up, saying it was thoroughly vetted and had a chance of success, according to Reuters news service.
Barra, who has walked away from the Mahoning Valley that had been loyal to GM through thick and thin, rebuffed criticism of the planned deal with Workhorse.
“We remain thinking it’s a strong possibility and think people should focus on opportunity and maybe every now and then a little optimism wouldn’t hurt anyone,” she said.
Asked if the deal was a “PR stunt” Barra said no. “We vetted many opportunities.”
The problem is Workhorse doesn’t have the $300 million GM supposedly wants for the 53-year-old manufacturing complex.
As The Vindicator pointed out in a recent Editorial, the fact that GM isn’t investing in the Workhorse project speaks volumes. The giant automaker is pulling out all the stops for a full line of electric cars, SUVs and trucks, which makes its decision not to invest in Workhorse most revealing.
While Barra has said all the right things about GM’s commitment to finding another occupant for the Lordstown plant, the reality is that the Mahoning Valley is now an afterthought in Detroit.
The Vindicator Editorial warned against premature celebration over the announcement of the potential sale and pointed to Ohio Gov. Mike DeWine’s cautious approach.
DeWine, a Republican who took office in January, noted that Workhorse’s plan depends on the company securing a major contract with the U.S. Postal Service for electric delivery trucks.
There are several big-name companies vying for the contract, including Ford, which means there’s no guarantee the Workhorse proposal will win out.
What if the Cincinnati-based company doesn’t get the Postal Service contract? GM is not saying, but it’s a safe bet that the huge complex in Lordstown will become a ghost.
The Valley is not longer part of GM’s long-range planning.
Last week, GM announced it will invest more than $4 billion in assembly plants in Indiana, Michigan and Texas to prepare for the launch of its next generation of pickups and SUVs.
GM also said new investments are occurring at plants in Ohio ahead of the release of 2021 models of pickups and SUVs.
The company said Tuesday it’s increasing capacity, improving operating efficiencies and making other upgrades at plants in Fort Wayne, Ind.; Flint, Mich.; and Arlington, Texas.
The Texas site manufactures popular SUV brands, including the Chevrolet Tahoe and GMC Yukon. Officials say $1.4 billion will be spent on the Arlington plant and upgrades are scheduled to be completed next year.
GM says it has invested more than $23 billion in its U.S. manufacturing base since 2009.
But here’s a tidbit of information that should make Valley residents who are already sick to their stomachs at the way GM has rewarded the region’s loyalty feel even worse.
According to the Detroit Free Press, GM is making new investments at plants in Moraine to expand diesel engine production; Toledo to expand 10-speed transmission production and more. Other investment include those previously announced in Dayton and Parma.
GM is also pumping money into plants in Romulus, Mich., Spring Hill, Tenn., and Lansing, Mich.
And here’s another shot across the Valley’s bow: GM will invest $20 million at Arlington Assembly in Arlington, Texas, to upgrade plant conveyors as it prepares to launch new full-size SUVs, the Free Press reported.
In addition to the Tahoe and Yukon, the company builds the Chevrolet Suburban and the Cadillac Escalade at Arlington Assembly, according to the newspaper.
So with all the upgrading that’s going on within GM’s manufacturing operation, why wasn’t the Lordstown assembly plant considered for a product to replace the highly successful Chevrolet Cruze?
The official company line is that there’s overcapacity in other facilities that GM needed to address.
In other words, the Lordstown plant is expendible. The loss of 4,500 high paying jobs has left a gaping hole that will not be filled even if Workhorse buys the plant. At most, 400 jobs would be created.
Something better than nothing, right?
Wrong. After all, President Trump promised this region that thousands of auto manufacturing jobs would be created after GM, Ford and Chrysler closed plants abroad and brought production back to the USA. The Big Three have largely ignored him.