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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