General Motors plans to sell its shuttered factory in Lordstown, Ohio, to a Cincinnati company that builds electric trucks. It offers some good news for a community that lost more than 1,700 jobs when the plant closed earlier this year.
President Donald Trump announced the deal with the company Workhorse on Twitter Wednesday morning. GM also plans to spend $700 million at three locations in Ohio and create 450 additional jobs at plants in Parma, Toledo and Moraine. Trump said he got the news in a conversation with GM CEO Mary Barra.
However, the deal dashes any hopes GM would reopen the factory where, until March, it had built cars for five decades.
GREAT NEWS FOR OHIO! Just spoke to Mary Barra, CEO of General Motors, who informed me that, subject to a UAW agreement etc., GM will be selling their beautiful Lordstown Plant to Workhorse, where they plan to build Electric Trucks. GM will also be spending $700,000,000 in Ohio...— Donald J. Trump (@realDonaldTrump) May 8, 2019
Workhorse is a Cincinnati-based company that makes commercial electric trucks and vans.
GM spokesman Dan Flores said the company is not disputing anything in Trump's tweets, and that it's in talks to sell the plant to Workhorse, but no final deal has been reached.
"However at this point in time we are not providing any additional details," Flores said, adding that more would be released later in the day.
"It Sounds Like Good News"
Gov. Mike DeWine said Wednesday he’s “cautiously optimistic” about the plan.
"I'm just by nature a cautious person, and until I know all of the facts, it sounds like good news," DeWine said.
DeWine says if Workhorse succeeds in landing a contract to sell trucks to the U.S. Postal Service, there could be as many as 3,000 jobs at the Lordstown plant.
"We have people who are, I would say, knowledgable about the negotiations who have told us that," DeWine said. "That would be one of the goals of the company as they grow their business - to get a contract with the Post Office."
The sale is subject to an agreement with the United Auto Workers union, which has been protesting GM's decision to close the plant.
"Done In Lordstown"
Reaction to the announcement were mixed. In a tweet, Sen. Rob Portman (R-Ohio) thanked Trump "for his help in bringing new production to Lordstown. Portman wrote that he's worked before with Workhorse.
Sen. Sherrod Brown (D-Ohio) released a statement saying "it's still too early to tell whether the proposed sale of Lordstown is ood news for workers there." Brown says that while he welcomes news of new jobs at other plants, GM can't "shirk" its responsibility to Lordstown employees.
Lordstown Mayor Arno Hill said he's waiting for details, including how many people might be employed.
"It's definitely better than having 6 million square foot building sitting empty," he said.
But news of the pending sale was greeted gloomily by former GM workers, who were hoping the company would reopen the factory that stopped producing the Chevrolet Cruze compact car in March.
Tim O'Hara, vice president of the local UAW, said the announcement dashes any hopes that workers had about staying in the area and continuing careers with GM. Many will be forced to transfer in order to preserve seniority and pension eligibility, O'Hara said.
"I guess that means they're done in Lordstown," O'Hara said. "Anybody that wants to continue working for them is going to have to transfer out."
Lordstown had about 1,400 hourly workers on one shift at the time the plant stopped production. But hundreds of others had been laid off earlier as GM cut two shifts to deal with slumping demand for the car. Only a skeleton crew remains on duty at the plant scrapping old parts, O'Hara said.
Terry Dittes, the UAW's national vice president, said in a prepared statement that the company should still assign a new product to Lordstown and keep the plant open. The union has sued over the closure of Lordstown and three other U.S. plants, saying the moves violate GM's contract with the union.
GM said the 450 jobs would be added at plants in Toledo, the Cleveland suburb of Parma and the Dayton suburb of Moraine.
The Moraine plant would get expanded diesel engine production for GM heavy-duty pickups, while a Toledo transmission plant will add workers to build 10-speed truck transmissions. A stamping plant in Parma, near Cleveland, will see expanded production and new laser welding technology, the company said.
Workhorse CEO Duane Hughes said Tuesday that the company is making progress in the transition from development to the production of electric vehicles. The company is on target, he said, to begin delivering its new electric vans at the end of this year.
"We remain focused on our 'Trucks First' initiative, which has enabled us to make significant advances in all phases of the manufacturing process," Hughes said.
Workhorse reported that its first quarter sales for this year were at $364,000, down from $560,000 for the quarter in 2018. It also reported having $2.8 million in cash and short-term investments.
The announcement came just after GM and the Canadian auto workers union reached a deal to save 300 jobs at an Ontario factory that is slated to close by the end of this year.
But the remainder of the 2,600 workers at the plant in Oshawa, near Toronto, are still scheduled to be laid off.