Workhorse no slam dunk to buy Ohio plant from GM
There are plenty of hurdles to clear.
General Motors' announcement that it was in talks to sell its shuttered Lordstown, Ohio, assembly plant to electric vehicle maker Workhorse was hailed as "great news,” but it appears as though that optimism might have been a bit premature.
Workhorse raised more than a few eyebrows when it was named by GM as the lead suitor for the Lordstown plant. After all, Workhorse is a little known maker of electric trucks and vans, and the Lordstown plant is a massive 6.2 million square foot facility with the capacity to build 410,000 vehicles per year.
And the deal looks even more implausible on paper. Workhorse posted a net loss of $36.5 million in 2018, and the company ended the first quarter of 2019 with just $2.8 million in cash, most of which is borrowed.
"I think we're missing some of the story," Jeff Schuster, president of global forecasting at LMC Automotive, told Automotive News. "Obviously, they're an extremely small player, and there are a lot of questions.”
Financial concerns aside, the United Auto Workers union is pushing back on a sale of the Lordstown plant to Workhorse. The union is steadfast in its opinion that GM should build a new vehicle at the Ohio plant rather than sell it to a company that, at best, will only use a tiny percentage of the plant's 4,500 person workforce.
GM's track record for selling off assets is also less than stellar. A decade ago the automaker struck deals to sell its Saturn and Hummer divisions, but both of those sell-offs ultimately fell apart.