GM sells the Lordstown plant for an electric pickup startup
Startup automaker Lordstown Motors announced late Thursday that it has purchased the plant and all of its robots and other equipment from General Motors for an undisclosed price. Lordstown Motors intends to start building electric pickup trucks there late next year.
Steve Burns, CEO and primary owner of Lordstown Motors, said buying a plug-and-play facility was a rare opportunity, making the deal particularly attractive.
"Normally, all the equipment has been stripped out. This is the first time I've heard of someone getting a fully functioning plant," he said. "The only way we can do this is if we buy a factory ready to build."
Burns said he plans to sell the company's pickup, Endurance, for around $ 52,000. He expects to have a production prototype ready in time for the Detroit auto show in June next year. Although the prototype is ready by then, starting production by the end of next year would be challenging for any carmaker, let alone a startup.
He said with the reduced fuel and maintenance costs, and the $ 7,500 federal tax credit, Endurance will be more affordable than a $ 37,000 gasoline or diesel truck.
But Lordstown Motors will face increasing competition from other electric pickup trucks on the horizon.
Union workers wanted
Lordstown Motors intends to start with about 400 workers. Most of the hiring will start in September 2020. Burns expects to pay union-level salaries of $ 32 an hour that veteran workers at GM will earn under the new employment contract. He also intends to have the workers represented by the United Auto Workers union, but he has not yet spoken to the union about his employment plans.
Burns said that the workers who previously worked at the facility before it closed have the skills he has been looking for.
"Where else can you get 400 people, eventually thousands of people, who can do this kind of work?" he said. "The workforce is one of the things we follow with this agreement."
Mixed bag for GM workers
Tim O & # 39; Hara, president of the UAW local in Lordstown, said he is not sure how many members would be willing to leave one of these GM jobs somewhere else, where they accumulate service time towards their GM pension, to take up a job with a start-up – though many want to return to Lordstown.
O & # 39; Hara said that about 400 of his members have not taken other GM jobs yet, but many of them have returned to school or started other careers or retired.
"Many have moved on. It's hard to say if they will work for [the startup]," he said.
O & # 39; Hara said it is absolutely positive that Burns is talking about using union workers and paying a union wage at the facility. But he said he would be skeptical until a deal is signed.
"It has been a years-long process of bad news for us," said O & # 39; Hara. "We continue through the stages of grief. I think most of our members are still angry and disappointed."
GM issued a brief statement on the sale stating that it believes that Lordstown Motors' plan "has the potential to create a significant number of jobs and help the Lordstown area grow into an electrification production hub."
Ambitious plans
Workhorse has a 10% interest in Lordstown Motors, and it licenses some of its intellectual property to its start-up for use in pickup trucks. It has also transferred 6,000 existing pre-orders received by Workhorse for its planned W-15 pickup. These will now be built by Lordstown Motors.
Like Workhorse, Lordstown plans to concentrate on fleet sales of its trucks to businesses such as construction companies or to city and city governments, rather than selling to consumers.
– CNN Business & # 39; Vanessa Yurkevich contributed to this report.