By Mike Colias, Paul Vieira and Christina Rogers 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 9, 2019).

General Motors Co. said it is in talks to sell its shuttered assembly plant in Lordstown, Ohio, to an electric-truck maker, a development that drew praise from President Trump for creating jobs in the politically pivotal state.

GM said Wednesday it is in discussions with electric-truck maker Workhorse Group Inc. and a newly formed startup led by the small company's founder to sell the factory, which was shuttered in March amid a falloff in sales of the small Chevrolet Cruze sedan that was built there.

"The move has the potential to bring significant production and electric vehicle assembly jobs to the plant," the auto maker said in a statement.

Steve Burns, the Workhorse founder behind the still-unnamed startup, told The Wall Street Journal that the company expects to at first hire a workforce numbering in the "hundreds" and intends to use unionized labor.

"As soon as we close, we want to retool and get to work quickly," Mr. Burns said, adding that the firm plans to build an electric pickup truck at the factory to be sold specifically to commercial fleets.

GM also said it will convert a Canadian assembly plant that had been earmarked for closure into a parts-making factory. The auto maker had vowed to salvage jobs in the wake of sharp criticism from elected officials on both sides of the border of its plan to close several plants as part of a cost-cutting restructuring.

The auto maker has been working behind the scenes to find a use for the Lordstown, Ohio factory that would salvage some jobs, people familiar with the matter said. GM executives were surprised by the severity of the political blowback from the job and factory cuts and are sensitive to the issue being dragged into next year's election cycle, the people said.

Members of Congress who represent the affected factory towns as well as Democratic presidential candidates have criticized GM's factory closures.

Workhorse, which builds and sells electric trucks and aircraft, had about 100 workers and less than $1 million in revenue last year, according to a securities filing.

GM's announcement followed a series of tweets on Wednesday from Mr. Trump, who said he was informed of the deal during a conversation with GM Chief Executive Mary Barra. Mr. Trump has severely criticized GM's closure of the plant and publicly pressed Ms. Barra in March to quickly find a solution that would save jobs.

"Just spoke to Mary Barra, CEO of General Motors, who informed me that, subject to a UAW agreement etc., GM will be selling their beautiful Lordstown Plant to Workhorse, where they plan to build Electric Trucks," Mr. Trump tweeted Wednesday.

Mr. Burns said he first started talking with GM about the plant in January and there were other suitors at the time. He said he was attracted to the 6-million-square-foot factory because it can be scaled up quickly for growth and included a stamping facility and paint shop. The last time the Lordstown factory was fully operational it employed several thousand workers around the clock.

He declined to specify a timeline for the talks, emphasizing that negotiations continue with GM and the United Auto Workers union, which currently represents hourly workers at the factory.

In a statement, the United Auto Workers reaffirmed its position that GM should continue to operate the Lordstown factory, citing a pending federal lawsuit filed by the union over its closing and several others in the U.S.

Kristin Dziczek, an economist and labor expert at the Center for Automotive Research, said it is likely that the sale of the plant will be contingent on continued union representation there. She said it is likely GM has been working with the UAW on the proposed sale.

"The best use of [the factory] is to continue to make vehicles or the next best option is to manufacture something," she said.

GM also said it has earmarked $700 million to invest across three of its factories in Ohio, which will create about 450 jobs. The company will look to fill those positions with workers who have been laid off in the auto maker's recent cuts, a GM spokesman said. A portion of that investment amount was announced by the company in March.

The facilities slated for upgrades include a factory in Toledo that makes transmissions, a diesel-engine plant near Dayton and a stamping facility in suburban Cleveland, GM said.

Mr. Trump lauded GM's investments in the state, saying car companies were bringing jobs back to the U.S.

"I have been working nicely with GM to get this done," Mr. Trump tweeted.

Mr. Trump criticized GM for its announcement in November that it would end production at its factories in Lordstown, Detroit and Oshawa, Ontario, putting thousands of jobs in jeopardy.

GM said last week that it has open positions for all the workers affected by those moves, though many would have to relocate.

GM's Canadian unit also said Wednesday it would convert its factory in Oshawa, Ontario, into a parts-making operation once vehicle assembly stops at the end of the year, as originally planned.

The move, unveiled at a Toronto press conference, comes after six weeks of talks with the local labor leaders, who had launched a high-profile campaign condemning GM's original decision to close the Oshawa factory.

The company said it would spend 170 million Canadian dollars ($126 million) to convert the Oshawa plant into an auto-parts operation focused on stamping and related subassembly. The plan is to employ 300 people, with the possibility of additional workers coming on board once the business picks up, said Travis Hester, GM Canada's president.

When the Oshawa plant closes, about 2,600 people will lose their jobs.

"GM plans to be one of Oshawa's leading companies and employers for many decades to come," Mr. Hester said. "The outcome we have here is pretty good."

Mr. Hester said the plant will perform stamping work for GM's CAMI plant in Ingersoll, Ontario, which produces the Chevrolet Equinox, and it has promising business for 50 components required in the post-sale process. The new parts operation "has a tremendous opportunity for significant growth," he said. "We are moving along quite well and we have a lot of things in the works."

The news should offer some relief to the Canadian economy and the country's factory sector, which has been mired in a slowdown since late last year due in part related to global-trade uncertainty.

"Am I happy today? The answer is No," said Jerry Dias, head of Unifor, the private-sector union that represents GM Canada workers. "Am I happier today than I was in November of last year? Yes."

Write to Mike Colias at Mike.Colias@wsj.com, Paul Vieira at paul.vieira@wsj.com and Christina Rogers at christina.rogers@wsj.com

 

(END) Dow Jones Newswires

May 09, 2019 02:47 ET (06:47 GMT)

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