Economic Development

Lordstown Motors Acquires GM Complex

By Jeremy Lydic and Josh Medore
LORDSTOWN, Ohio – With the acquisition of the General Motors Lordstown Complex, Lordstown Motors Corp. will locate its headquarters to the plant and to begin production of the Endurance all-electric pickup truck line.

“We are committed to the people of Lordstown, we will locate our headquarters in the Lordstown plant, and we plan to build the Endurance pickup truck utilizing experienced workers who helped produce millions of vehicles in this very same plant,” said Lordstown Motors CEO Steve Burns in a press release.

Terms of the deal have not been disclosed, according to Bloomberg, but Burns reported the company is “going to be fundraising for a while. “We have to stand up an auto company,” he told Bloomberg.

Interest from outside auto manufacturers in the 6.2-million-square-foot plant was first disclosed in May, when President Donald Trump tweeted that GM was meeting with Workhorse, an electrified-vehicle company now backing Lordstown Motors, to sell the plant. In the time since, Lordstown Motors has emerged as the primary buyer for the complex. 

“The quality and precision of the production robotics and equipment in the Lordstown facility is evident,” said Rich Schmidt, chief production officer, Lordstown Motors, and former director of manufacturing, Tesla Inc. “Our team feels this is a factor to help us hit the ground running in building the Endurance pickup truck.”

On its media website, General Motors Co. said it “is committed to future investment and job growth in Ohio and we believe LMC’s plan to launch the Endurance electric pickup has the potential to create a significant number of jobs and help the Lordstown area grow into a manufacturing hub for electrification.”

“Exciting times,” says James Dignan, executive director of the Youngstown/Warren Regional Chamber. “We’ve got a locally owned and operated plant that’s hopefully going to produce vehicle in a year or so.”

Dignan was expecting the announcement, though he didn’t expect it so soon, he says. The chamber has been working closely with Lordstown Motors, which looks to move at an “aggressive scale” to start production by the end of 2020 and hit its mark of 10,000 vehicles in its first year of production, Dignan says.

“We’re connecting them with our local members who can provide some of their supply chain. Pieces, parts and talent,” he says, noting that Lordstown Motors already has about 8,000 vehicles presold.

The company “could possibly push production up to 25,000 vehicles in year two,” he adds.

Along with the chamber, entities at the table discussing the project have included elected officials, America Makes, Youngstown Business Incubator, Brite Energy Innovators, Eastern Gateway Community College and Youngstown State University.

“Lordstown Motors, along with other planned investments in the area and other startups, are positioning northeast Ohio as a hub for technology, which completely reshapes the future trajectory of the whole Mahoning Valley,” said Jim Tressel, YSU president. “Think of being in the epicenter of EV technology. We must take charge of our future.”

In an effort to drive greater speed to market, Lordstown Motors will license components of Workhorse Group’s electric drive technology in building the Endurance line, according to a company release. The agreement with Workhorse also allows the transfer to Lordstown Motors of 6,000 existing preorders received by Workhorse for its W-15 prototype.

In September, Burns said the company will initially target the fleet market. According to Bloomberg, Workhorse is among the final bidders for a contract with the U.S. Postal Service to build a fleet of electric vehicles.

“We’re honored to have the opportunity to build electric vehicles in Lordstown because the people of Lordstown and the plant are and will be the history and future of the auto industry,” Burns said in a statement. “When the first Endurance electric pickup rolls off that line, it will be a great day for Lordstown, Ohio and America.”

The Endurance pickup truck is designed to be the first production vehicle that utilizes a four-wheel-drive hub-motor system, which reduces the number of moving parts, according to the company. The hub motor design allows for fewer breakdowns, lower maintenance and less cost, translating into lower operational costs over its lifetime, according to the company.

Features include an on-board power export, so fleet workers can use power tools at the job site. The truck is lightweight with all-wheel drive and a low center of gravity while maintaining ground clearance, according to the company.

Already the company has hired its plant manager and chief operating officer, Dignan says. As for assembly, Lordstown Motors expects to hire about 400 to start, he says. Burns “has reiterated his intent that production workers will be UAW,” and will need to enter into negotiations to make that happen.

“And that’s going to have to happen pretty soon,” Dignan says. “Hopefully some of these UAW 1112 members will be able to find positions here.”

What attracted the company to Lordstown, Burns said at the September event hosted by Brite Energy Innovators, was the quality of workers, many of whom used to be employed by General Motors.

“What attracted us was the plant, but the workforce and people are the secret weapon,” he said. “A lot of people are available and they have the skillset to do the work. It’s very difficult to find that in quantity.”

He said that Lordstown Motors’ headquarters would be in the village, with the majority of its workforce based there.

“Every person won’t work it, but it will be the majority. This will be our headquarters,” Burns said. “We want to build an epicenter here- wire harnesses, motors, battery cells and all the new components. We want those in our building if possible. We’re not just bringing a vehicle to Lordstown that can run its five-year course.”

At that event, Burns also said Lordstown Motors plans to use union labor, but no formal commitment has yet been made. At the time, United Auto Workers was in the midst of a month-long strike against GM and has not been in contact with the startup automaker, UAW Local 1112 President Tim O’Hara said Thursday.

“Any type of jobs are good” for the Mahoning Valley, and “we hope that if it does come to pass, that there are union jobs that will be represented by UAW 1112,” O’Hara says.

“Obviously, nothing is going to replace the 5,000 jobs that we lost at that plant under GM, and the thousands of spin-off jobs,” he says.

The UAW-GM negotiations hinged on the status of three plants, including Lordstown, that had been given “unallocated” status. The new national agreement did not include a provision or new product for the Lordstown Complex, paving the way for Workhorse to acquire the site.

The acquisition, said Gov. Mike DeWine in a statement, “an important step for future development in the community. We and our partners can now move to the next phase of attracting new automotive manufacturing jobs to the Mahoning Valley.”

In a statement, state Sen. Sean O’Brien said he finds the sale of the plant encouraging.

“There is a lot of potential for the Lordstown Motors project, and this represents an important first step in the development of an all-electric truck fleet in our community,” he said. “This project with Lordstown Motors could offer great opportunity for research and development, ancillary business development and continued revitalization in the Valley. The Valley is in a transformational phase and this announcement further shows that we’re open for business.”

U.S. Rep. Tim Ryan said he is proud of the workers who’ve passed through the GM Lordstown Complex since it opened in 1966 and that he expects a bright future to stem from the electric-vehicle industry in the area.

“Electric vehicles are the future of transportation, and my goal is to make sure these vehicles are built right here in northeastern Ohio. I will continue to fight to bring jobs back to this facility and the district, which has and will always be my top priority,” he said in a statement. “I stand ready to help this new company start building electric trucks in the Valley and put Northeast Ohioans back to work. In addition to building electric vehicles, I am also working to ensure that northeastern Ohio is at the forefront of electric vehicle components such as batteries and fuel cells.”

U.S. Sen. Rob Portman, R-Ohio, said since GM announced its intentions to discontinue production of the Chevrolet Cruze at the Lordstown plant, he had “pushed hard for the company to do the right thing” and allocate a new product for the plant.

“GM instead chose to sell the facility to Lordstown Motors, which it says is the best option for the future of the plant,” Portman said in a statement. “I agree that Lordstown Motors has the potential to create some much-needed jobs in the Mahoning Valley with cutting-edge electric vehicle technology, but the chances of that happening are much better if GM invests in this new venture to help ensure its success and a new path for Lordstown. I will continue to work with community leaders to do whatever I can to return the Lordstown plant to its full potential.”

Ohio Senate President Larry Obhof, R-Medina, and state Sen. Michael Rulli also praised the announcement.

“We never gave up on the workers, and the community. The workers resiliency and the fabric of this community lights the way to the future of the Mahoning Valley. Our people are ready to get back to work,” Rulli said.

Copyright 2019 The Business Journal, Youngstown, Ohio.