Steve Burns expects the workforce at the former General Motors Lordstown Assembly Plant to be union workers when production on an electric pickup starts anew there next year.
He likens the workers to a secret weapon.
The CEO of Lordstown Motors, which on Thursday took possession of the more than 6-million-square-foot plant near Youngstown, Ohio, said that will put his company in a league with no one else because he doesn’t know of any other electric vehicle startups with a union workforce. The company is a new entity backed by Workhorse Group, a Cincinnati-area electric vehicle company.
“To us, (the workers are) part of the secret weapon because we have taillights, we have seats, we have dash … we have all the things that require a human to assemble. We still have to paint the vehicle and stamp out the metal so we need that skilled workforce,” Burns said in an interview Friday with the Free Press, a day after the sale closed.
The price has not been disclosed, though the Tribune Chronicle of Warren, Ohio, reported that U.S. Sen. Rob Portman said the price was $20 million. Portman, an Ohio Republican, made the remarks Friday while at the Youngstown Air Reserve Station in Vienna. Burns told the Ohio paper he didn’t know where Portman got the number, but didn’t say it was wrong.
Burns told the Free Press that 450 production jobs are expected “out of the gate,” with the bulk of hiring in September before production starts in November. Wages will be competitive, Burns said. He noted he has not reached out yet to the UAW.
The UAW issued a statement noting that “we are committed to making sure there are quality, good-paying jobs in Lordstown.”
That 450 is a far cry from the 5,000 people who once worked at the factory, but Burns said “our goal is to exceed that.”
“We’re making this our headquarters, so we want sales and marketing and as much engineering as we can to come out of that facility,” Burns said.
He described a vision of an electric vehicle hub for the Midwest and a plant where electric motors, battery cells, battery packs and ancillary products are built.
“Since we’re a pure play electric and don’t need transmissions or engines or differentials or driveshafts, all those things that grew up around Detroit, we want the things that we need to grow up around Lordstown, if possible. We don’t want to be over-lofty, but we have the opportunity to do it, and we are focusing on it,” Burns said.
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The company will focus production on electric vehicles for fleet sales, starting with the full-size pickup, then look to add a midsize pickup and SUV. The facility will need to be retooled to produce the new vehicles.
The Lordstown plant produced the Chevy Cruze until earlier this year, when it was idled by GM. The announcement almost a year ago by GM that it would “unallocate” Lordstown, along with transmission plants in Warren and the Baltimore area, was considered a betrayal by rank-and-file workers and was one of the most contentious issues during the recently settled UAW strike. One of the facilities on that initial list of plants — Detroit-Hamtramck Assembly — ultimately was selected for a $3 billion investment for electric pickup production.
Asked about skepticism that the company would be able to succeed, Burns pointed to Workhorse’s track record.
“I founded a company called Workhouse and worked there for 12 years as CEO. We’re the only company to put electric trucks on the road in the United States, so I think that gives us an edge,” Burns said, noting that the company has a very specific focus — fleet sales — that is not likely to put it in direct competition with companies such as Rivian or Tesla.
Workhorse, however, has itself reported lower sales and losses recently. In a news release Friday, the company said third quarter sales were at $4,000, down from $11,000 during the same period in 2018. The company also suffered a net loss in the quarter of $11.5 million, which was higher than a $5.5 million loss during the third quarter 2018.
“The decrease in sales was primarily due to a decrease in volume of trucks delivered partially offset by improved pricing in 2019,” the release said. “The greater net loss was due to higher interest expense in the third quarter of 2019 compared to the third quarter of 2018.”
However, the company reported more cash on hand.
“As of Sept. 30, 2019, the company had cash, cash equivalents and short-term investments of $9.3 million compared to $1.5 million as of Dec. 31, 2018,” the release said.
Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence. Jamie L. Lareau contributed to this report.
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