Trump Lordstown sale tweet overblown: Darcy cartoon

Trump Horse

Trump hyped that the Lordstown GM plant would be purchased by Workhorse, a small electric truck company, employing no more than 100, that needs investors to stay in business.

CLEVELAND, Ohio -- President Trump’s tweet hyping the potential sale of the Lordstown GM plant to Loveland, Ohio struggling electric truck maker, Workhorse, was premature and as overblown as Trump’s boasts about his own wealth and business acumen.

Workhorse and the Trump organization have two characteristics in common. They employ few people and they lose $ millions. Just days before Trump tweeted about the sale of the Lordstown plant, Workhorse informed regulators that if it didn’t get new financial investment, it wouldn’t be able to remain in business.

“Our existing capital resource will be insufficient to fund our operations through the first half of 2019. If we are not able to obtain additional financing and/or substantially increase revenue from sales we will be unable to continue as a going concern.”

Workhorse, which employs no more than 100 people, only had revenue of just over $700,000 last year. In the past two years it has lost over $60 million. From 2007, when it first plugged in, to 2018, the maker of electric trucks and delivery drones has lost over $140 million.

On top of the financial woes, it’s also a bad sign the Workhorse website has been down all week. Maybe Workhorse can get a contract from Mayor Frank Jackson for the Cleveland Airport.

Governor Mike DeWine seemed to be telling Trump to “hold your hype horses” when he spoke about the potential sale. A far more cautious DeWine pointed out a deal hasn’t been reached and appears to be contingent on Workhorse being awarded a huge government contract from the United Postal Service to produce a new fleet of electric postal vehicles. Workhorse is one of 5 finalists for the contract.

However a deal is contingent on more than just the USPS contract. Workhorse needs investors to stay in business, and so does the new entity being formed to buy the plant, which Workhorse would only be a minority investor in, according to it’s founder and former CEO, Steve Burns. Burns is reportedly working to set up an outside entity to purchase the plant in partnership with Workhorse. A press statement released by GM appears to allude to that. GM only said that it’s “in discussions” with Workhorse along with “an affiliated, newly formed entity.”

Both Workhorse and that entity will need investors beyond the USPS contract. There has been some speculation on GM itself being a potential investor in the new entity.

GM and Ford are both said to be wanting to develop electric and hybrid trucks. GM was at one time thought to be getting into a partnership with Rivian, a startup electric truck maker, like Workhorse, but that deal fell through. Ford is reported to be now partnering with Rivian, as an investor.

Over 1,500 GM workers were displaced when GM decided to idle Lordstown, instead of assigning it another vehicle to manufacture.

Because Workforce is an Ohio company, and the jobs need in Lordstown is so great, one would hope that there is something significant known that hasn’t been made public yet. That Workhorse is going to be awarded the USPS contract. That they will have major investors, possibly even GM. But even if all that were to come to pass, it’s doubtful it would replace all of the jobs lost and damage done to related businesses in Lordstown.

We can also only hope that Trump’s tariff trade war doesn’t hurt any potential buyer of Lordstown. Maybe Russian investors will buy it to produce Ivanka’s fashion line or turn it into a Trump and Sons indoor golf course.