GM News: Lordstown Sold to Lordstown Motors Corp

[Drew Dowdell]

GM's Lordstown facility has been sold to startup Lordstown Motors.  Lordstown Motors will produce the Workhorse Endurance pickup truck, an all-electric truck, at the site. 

The Endurance has all-wheel drive via 4 motors, one for each wheel.  It also has outlets to allow for the use of power tools. Workhorse is also in the bidding to make plug-in mail trucks for the U.S. Postal Service.  Workhorse has 6,000 orders for a truck based on the W-15 Prototype, and those orders would be moved to Lordstown for production. Workhorse is targeting fleet buyers. With fewer moving parts and lower fuel costs, it could translate to lower cost-to-own for fleet operators. 

Lordstown Motors still needs to go through several more rounds of fund raising in order to continue development, conduct safety testing, and retool the plant for production. 

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[G. David Felt]

This sounds to me like GM unloaded an expensive property to keep mothballed and will write off a loss against profits to help minimize a tax bill.

I question Lordstown Motors ability to get capital and restart this plant. To me both Lordstown motors and Workhorse are dead companies walking.

[Drew Dowdell]

36 minutes ago, dfelt said:

This sounds to me like GM unloaded an expensive property to keep mothballed and will write off a loss against profits to help minimize a tax bill.

I question Lordstown Motors ability to get capital and restart this plant. To me both Lordstown motors and Workhorse are dead companies walking.

Depends if they can snag that post office contract or not. 

[riviera74]

If only they raised a billion dollars first . . . . . .

[Drew Dowdell]

Makes me wonder how cheap Lordstown Assembly went for. Did it include all/most of the tooling?  GM and LMC aren't saying. 

[ocnblu]

May as well bring in the Caterpillars now to knock down the building.

[riviera74]

If GM were really smart, it would sell EVs on the cheap to reclaim market share and build their way to dominance again.  Lordstown is currently unnecessary so I am all for the sale.

[daves87rs]

Not getting warm fuzzies here.....

[ocnblu]

7 hours ago, riviera74 said:

sell EVs

That is the problem though.  SELLING them to a disinterested public.

[riviera74]

2 hours ago, ocnblu said:

That is the problem though.  SELLING them to a disinterested public.

The public is disinterested because 87 regular is about $2.50/gallon.  Also most pure EVs are too expensive for normal people to ignore the used car market given how expensive a lot of NEW ICE cars are these days.

[balthazar]

On 11/8/2019 at 1:21 PM, dfelt said:

This sounds to me like GM unloaded an expensive property to keep mothballed and will write off a loss against profits to help minimize a tax bill.

I would think GM paid off/depreciated Lordstown long ago; plant came online in 1965.
Any monies exchanged would have to go on the income side, no?

[G. David Felt]

43 minutes ago, balthazar said:

I would think GM paid off/depreciated Lordstown long ago; plant came online in 1965.
Any monies exchanged would have to go on the income side, no?

What about the investments for new tools, robotics, updates to manufacture auto's at that plant location. Would those capital investment costs not need to be put against the income side?

[balthazar]

Sure, if not written down already.
But the bulk of the value has to be the property & buildings over any equity left in tooling (a lot of which is probably not applicable to Workhorse's needs).

Lordstown is 6.2 million square feet on 905 acres. 

For some comparison, Baltimore Assembly was 182 acres with 3.1 million SF when it sold for $27M in 2005.

Plant half the age, twice the SF, 4 times the property, 15 years later? I’m going to guess the price was $125M.

Edited November 9, 2019 by balthazar

[oldshurst442]

22 hours ago, ocnblu said:

May as well bring in the Caterpillars now to knock down the building.

The irony if it be these to clean up the mess:

 

Edited November 9, 2019 by oldshurst442

[Drew Dowdell]

Well... if nothing else, I wish an American manufacturer the best of luck. I hope they create many jobs to help replace those which were lost. 

[riviera74]

11 minutes ago, Drew Dowdell said:

Well... if nothing else, I wish an American manufacturer the best of luck. I hope they create many jobs to help replace those which were lost. 

So we all hope.  I am sure that Lordstown needs those jobs in the area.

[USA-1]

Good Lord somebody tell them to stay with a private workforce...wouldn't the recent GM UAW Strike be any kind of warning?! Wake up Workhorse Board of Directors!!

https://www.autoblog.com/2019/11/11/new-lordstown-plant-owner-ev-truck-workforce-likely-to-be-unionized/?utm_source=spotim&utm_medium=spotim_recirculation&spotim_referrer=recirculation&spot_im_comment_id=sp_K1uZhoSA_2184869_c_OsS3iQ

[Robert Hall]

3 hours ago, USA-1 said:

Good Lord somebody tell them to stay with a private workforce...wouldn't the recent GM UAW Strike be any kind of warning?! Wake up Workhorse Board of Directors!! 

I can't see that flying in NE Ohio..still a pretty strongly unionized region, albeit in much smaller numbers than it once was. 

Edited November 13, 2019 by Robert Hall

[USA-1]

2 minutes ago, Robert Hall said:

I can't see that flying in NE Ohio..still a pretty strongly unionized region...

Well, something needs to change...unions aren't what they used to be about...it's all about upper management GREED anymore, not the workers or the company employing them.

https://video.foxbusiness.com/v/6101444253001/#sp=show-clips

[Drew Dowdell]

They aren't going to get the salaries they got from GM though. 

[USA-1]

4 hours ago, Drew Dowdell said:

They aren't going to get the salaries they got from GM though. 

Of course not, but the upper echelon at the union they join won't be any better. I think we all can agree with that.

[ccap41]

On 11/9/2019 at 12:37 PM, balthazar said:

I would think GM paid off/depreciated Lordstown long ago; plant came online in 1965.
Any monies exchanged would have to go on the income side, no?

39 years is the amount of time a business can amortize/depreciate the expense. That's both property and building(done individually, obviously). 

On 11/9/2019 at 1:21 PM, dfelt said:

What about the investments for new tools, robotics, updates to manufacture auto's at that plant location. Would those capital investment costs not need to be put against the income side?

Depending on the equipment itself, they're depreciated over 5-7 years.