×

Workhorse pulls out of protest over trucks

Last-mile delivery truck manufacturer Workhorse Group Inc., an early equity investor in Lordstown Motors Corp., has voluntarily dismissed its protest over the U.S. Postal Service’s decision to award a lucrative contract to build the mail carrier’s next-generation delivery truck to a competitor.

The Cincinnati-based technology company argued in the challenge it filed in June that the postal service acted irrationally by giving the contract to Oshkosh Defense, a division of Wisconsin-based Oshkosh Corp.

The 10-year contract could be worth up to $6 billion and calls for the production of up to 165,000 new delivery trucks for the postal service.

The selection of Oshkosh, which proposed a mix of trucks powered by battery and fuel-efficient internal combustion engines, was announced in February by Postmaster General Louis DeJoy. Workhorse Group proposed a fully electric fleet.

New Workhorse chief executive Rick Dauch said that in his short, six-week tenure as CEO of the company, he has undertaken an intensive review of the business, including its postal service bid and protest.

“The federal government has announced its intention to replace its fleet with electric vehicles, and we believe that the best way for us to work with any governmental agency is through cooperation, not through litigation,” Dauch said. “By withdrawing our protest, we can also better focus our time and resources on initiatives that we expect will be more productive for our company.”

The withdrawal headed off oral arguments that were scheduled last week in the case before the U.S. Court of Federal Claims.

In July, lawyers for the government and for Oshkosh filed similar motions asking the court to dismiss Workhorse’s claim, arguing the company did not exhaust its administrative remedies with the postal service.

Oshkosh’s motion states Workhorse initiated the first step of the appeal process, but when it was determined the award was proper, instead of further appealing the decision, Workhorse “sat idle for three months” before filing the complaint in court.

“Workhorse’s failure to complete the administrative appeal process is fatal to its case,” the motion states.

Last month, the Wall Street Journal reported Workhorse was being investigated by the enforcement division of the U.S. Securities and Exchange Commission. The paper cited a June 30 letter denying a public records request from a self-described short-seller.

In August, Workhorse sold nearly three-quarters of its equity stake in Lordstown Motors when it unloaded 11.9 million shares of the Lordstown-based electric truck startup’s Class A common stock July 1 to Aug. 6.

The sale netted Workhorse about $78.8 million, but the company reported to the SEC it booked a $52.1 million loss with the sell-off.

Workhorse and Lordstown Motors early on partnered on a three-year license agreement that gives Lordstown Motors access to certain intellectual property in exchange for 10 percent stake in the company, which plans to launch its all-electric pickup truck, the Endurance, in limited production sometime this month.

Both companies were founded by Steve Burns, who abruptly resigned at Lordstown Motors CEO in June. No reason was given for his stepping down, but the move came in tune with an admission by the company that statements regarding preorders for the company’s flagship truck, the Endurance, were inaccurate.

rselak@tribtoday.com

NEWSLETTER

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *
   

COMMENTS

Starting at $4.39/week.

Subscribe Today