Workhorse to Meet With USPS Over Lost Contract
YOUNGSTOWN, Ohio – Workhorse Group Inc. plans to meet with officials from the United States Postal Service this week to discuss why the company was overlooked for a lucrative contract for the USPS’s next generation delivery vehicles.
“This is not the result we anticipated or had hoped for,” Duane Hughes, Workhorse CEO, said on a conference call with analysts Monday to discuss the company’s 2020 fourth quarter and full-year earnings.
Last week, the USPS announced it had awarded a 10-year, $6 billion contract to Wisconsin-based Oshkosh Defense, a subsidiary of Oshkosh Corp., to build between 50,000 and 165,000 new delivery vehicles. Workhorse, an electric-delivery van manufacturer based in Loveland, Ohio near Cincinnati, was among the handful of finalists for the contract.
Hughes said the company has requested “additional information” from the USPS and has scheduled a face-to-face meeting with the agency March 3. “We understand that many people want answers and information in a timely manner. We continue to work with the Postal Service according to the terms of our engagement,” he told analysts.
Workhorse stock collapsed in the wake of the news. Company shares cratered more than 47% on Feb. 23 to $16.46 per unit. Share prices closed at $17.34 on Monday.
“To be clear, we intend to explore all avenues that are available to us,” Hughes said.
He said that the company is still technically under a non-disclosure agreement with the USPS, and noted he was not privileged to any of the competitors’ proposals. “Our RFP stuck to our stripes,” he said. “We gave them an RFP that was based on the six prototype vehicles we delivered to them.”
Hughes said that Workhorse is the “most confident” EV maker in the last-mile delivery segment. “We feel like we are the best solution for anyone who wants to take a fleet all-electric, particularly in the last-mile delivery space.”
Workhorse has 10% a stake in Lordstown Motors Corp., which could have been contracted to build the vehicles — or portions of the new delivery vans — for Workhorse. Lordstown Motors last year purchased the former General Motors Lordstown plant and is in the process of building beta models for the all-electric Endurance pickup.
Lordstown Motor’s chairman is former Workhorse CEO Steve Burns.
Ohio lawmakers have urged President Joe Biden to halt the postal truck contract until a full review is conducted to determine whether inappropriate political influence was involved in the decision to award Oshkosh the contract.
On Monday, U.S. Reps. Tim Ryan, D-13, and Marcy Kaptur, D-9, and Democrat U.S. Sen. Sherrod Brown wrote a letter to President Biden saying that the award stands in contrast to the president’s recently signed executive order that calls for the transformation of the federal vehicular fleet to all-electric vehicles.
“This contract will have consequences for decades to come and, as such, we have serious concerns it could be a wasted opportunity to address the climate crisis and the reindustrialization of our manufacturing sector,” the lawmakers wrote.
The full letter to President Biden can be found at Brown.senate.gov.
Copyright 2022 The Business Journal, Youngstown, Ohio.