General Motors is in talks to sell one of the North American factories it these days closed. The potential client? Workhorse Group, an Ohio-based EV startup that has spent the previous couple of years suffering to deliver an all-electric pickup truck to market.
The deal became prematurely announced by means of President Donald Trump in a tweet Wednesday morning. Trump has spent the remaining half-yr chastising GM for remaining the Lordstown, Ohio assembly plant in question (along side two others), announcing CEO Mary Barra made a “big mistake,” and perilous that the automaker turned into “no longer going to be treated properly” via his administration.
But his tone modified Wednesday, when he claimed that he had “GREAT NEWS FOR OHIO!” He said Barra instructed him GM is within the system of selling the Lordstown plant to Workhorse, “situation to a [United Automobile Workers] settlement and many others.”
Trump’s tweet came hours ahead of an legitimate declaration from GM. He became additionally putting a whole lot of weight on that “and many others.,” for the reason that a deal is actually a ways from done.
One motive for the holdup is that Workhorse Group is currently mired with monetary issues, which could complicate the acquisition of a massive facility like the Lordstown plant.
Originally founded in 1998 as a industrial van producer, Workhorse changed into bought by means of trucking large Navistar in 2005. Navistar sold Workhorse to AMP Electric Vehicles in 2013, a company that retrofitted combustion engine automobiles with EV powertrains.
Since then, Workhorse has been targeted on developing electric powered (and electric-assisted) industrial trucks, and has partnerships with trucking employer Ryder and UPS. Workhorse is also one in every of 4 final businesses in opposition to end up the maker of the US Postal Service’s next-era mail vehicles. In 2017, the agency unveiled a layout for an all-electric powered pickup truck called the W-15.
Workhorse is publicly traded at the NASDAQ stock exchange, and recent financial disclosures there paint a bleak picture of a business enterprise struggling to tread water. The business enterprise, which has in no way been worthwhile, pronounced a $36.5 million loss final year as its annual income dropped from $10 million in 2017 to just $763,000 across all of 2018. It had just $1.5 million in coins at the quit of ultimate 12 months.
To staunch the bleeding, Workhorse struck a deal at the beginning of 2019 with hedge fund Marathon Asset Management, which is understood for investing in distressed agencies. Marathon pledged up to $35 million in financing, with Workhorse the use of all of its assets — including important patents — as collateral. Workhorse had to use a number of that money to pay off preceding loans that were already coming due, and admitted in a current economic filing that it would probably only cowl the organization’s expenses via the second zone of this yr. It additionally not on time the electrical pickup truck.
The address Marathon additionally comes with “regulations on [Workhorse’s] capability to remove assets, enter into mergers, acquisitions or other business mixture transactions, incur additional indebtedness, grant liens, pay dividends and ensure other confined payments,” in step with a current monetary filing.