Rob Portman says ex-GM plant sold for $20M
Workhorse CEO?calls facility and land ‘tremendous value’
LORDSTOWN — General Motors sold its idled Lordstown assembly plant to electric vehicle startup Lordstown Motors Corp. for $20 million, U.S. Sen. Rob Portman said.
Some may call that a bargain.
Portman, a Cincinnati Republican, said he was told the price was a lot less than what GM could have commanded for the massive facility that closed March 6. The asset transfer to Lordstown Motors finalized Thursday.
Portman made the remarks Friday while at the Youngstown Air Reserve Station in Vienna, but Lordstown Motors CEO Steve Burns said later Friday he doesn’t know why Portman said what he said.
“We don’t put out any numbers, so I’m not sure why he is saying that,” Burns said.
GM spokesman Jim Cain declined to comment, saying the automaker is not discussing terms of the sale.
The figure Portman quoted is in the ballpark of a comparable sale, that of a former Mitsubishi plant in Normal, Ill., that was bought by electric vehicle manufacturer Rivian and repurposed.
Published reports show that sale in January 2017 was for $16 million. The plant closed in 2015 due to dwindling production.
It is 2.4 million to 2.6 million square feet. The former GM complex is 6.2 million square feet.
The asset sale agreement lists real property at 2300 Hallock Young Road and 2369 Ellsworth Bailey Road. The Trumbull County Auditor’s Office shows the land at 2300 Hallock Young is 485 acres with a value of $25.4 million. The office’s website lists property on Ellsworth Bailey Road, 152 acres, but no value is listed.
The equipment inside the plant is part of the sale agreement.
Burns said Lordstown Motors Corp. purchased more than 700 acres, a number replicated by Duane Hughes, CEO of Cincinnati-based Workhorse Group Inc., an electric delivery truck manufacturer founded by Burns that owns a 10 percent stake in Lordstown Motors.
Hughes said the land purchase was 740 acres during Workhorse’s third quarter 2019 financial results conference call Friday morning.
“This transaction is (a) tremendous value to Workhorse. It represents non-dilutive equity and potential revenue streams through licensing, royalties and engineering services from Lordstown Motors Corp.,” Hughes said. “The assembly complex includes a 6.2 million-square-foot manufacturing facility on 740 acres with more than 1,200 robots and an experienced workforce that has been producing automobiles for generations.”
Terms of the intellectual property licensing agreement between Lordstown Motors and Workhorse, also signed Thursday, call for Lordstown Motors getting a three-year exclusive license for certain intellectual property belonging to Workhorse in exchange for the 10 percent initial equity stake.
Other parts include Workhorse receiving 1 percent of the gross sale price of each Lordstown Motors truck sold through the first 200,000 and additional 4 percent commission on the gross sales of trucks sold that fulfill Workhorse’s 6,000 pre-orders for its W-15 truck transferred to Lordstown Motors.
Workhorse reported its net loss of $11.5 million in its third quarter compared to a net loss of $5.5 million in the same three months in 2018. It posted sales of $4,000, down from $11,000 in the third quarter last year.