GM selling Lordstown plant to electric truck startup
LORDSTOWN, Ohio – General Motors is selling their Lordstown plant to Lordstown Motors Corporation, an electric-truck startup.
GM opened the Lordstown plant in 1966. It closed earlier this year after General Motors announced a restructuring plan that required closing several facilities.
Lordstown Motors plans to build electric pickup trucks and delivery trucks. They are hoping to acquire a contract to make plug-in mail trucks for the United States Postal Service.
They have wanted to take over the closed car factory for quite some time, which is in part why the startup was formed.
Now that the company has reached an acquisition agreement, Steve Burns, Chief Executive Officer of Lordstown Motors, says he's turning his attention to raising funds to convert the plant from building gasoline-burning Chevrolet Cruze sedans to plug-in pickups.
The United Auto Workers reportedly oppose the Lordstown plant sale because of the alleged risk involved. The UAW cites financial concerns associated with a startup, as well as the uncertainty in future demand for electric vehicles.
However, Burns says he's confident in Lordstown Motors' ability to be successful, especially since he hired a team of veteran workers from GM, Ford Motor Co. and Karma Automotive LLC. His chief production officer also served as a manufacturing director at Tesla for over three years.
"We've got a solid team and I'm confident in our fundraising efforts," Burns told Bloomberg News.
Terms of the sale and the investors who are behind the deal weren't disclosed Thursday by the privately held Lordstown Motors. However, Burns said that GM is not among the investors.
Acquiring the plant will allow the company formed just months ago to begin seeking more money so that it can begin production of a new electric pickup truck that will be marketed to commercial customers such as utility companies and municipal governments.
So far, the focus has been on designing the truck, building its management team and buying the plant, he said. "We've raised money to get this far, but the large fundraising starts now," Burns said.
The company, he said, had a unique opportunity to buy an auto plant still equipped welding, stamping and painting operations needed to produce vehicles.
"Normally when these plants shut down, by the time someone buys it, it has been gutted," he said. "To build from scratch would be in the billions."
While production will be limited in the beginning, the plan is to create a hub for electric vehicle manufacturing. "We didn't buy this plant to not fill it up and get to full production," he said.
Burns said he knows there will be skepticism until Lordstown Motors starts producing an electric pickup truck that customers love.
The trucks, he said, will use hub motors in each wheel, eliminating the need for drive shafts and other parts.
"We're essentially reinventing electric vehicles," Burns said. "The wheel is the motor. The only moving parts on this truck are the wheels. It's a super, simple vehicle."
The deal comes as GM itself is trying to move toward the future with an eye on autonomous and electric vehicles, with plans announced earlier this year to build its own electric pickup truck at a Detroit plant. GM also is building an electric vehicle battery cell factory in the Lordstown area that will be run by a joint venture.
Burns thinks his company can compete for a share of the electric vehicle market by being quicker to adjust to new technology and by targeting commercial, fleet customers who want more than what conventional trucks can supply.
Congressman Tim Ryan (OH-13) released the following statement to FOX 8 regarding the acquisition:
"I am very encouraged that the Lordstown plant has been acquired by Lordstown Motors Corporation. I am extremely proud of the men and women who helped build the General Motors brand of vehicles at the Lordstown Complex. Electric vehicles are the future of transportation, and my goal is to make sure these vehicles are built right here in Northeast 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. 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 Northeast Ohio is at the forefront of electric vehicle components such as batteries and fuel cells."
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