Lordstown Motors building 'Voltage Valley' in Ohio
Lordstown, Ohio — A lot has happened in the year since the final Chevrolet Cruze rolled off the assembly line at the old General Motors Co. Lordstown Assembly complex March 6, 2019.
The plant has a new owner now, Lordstown Motors Corp., and the people here are starting to have a different outlook on the future for the sprawling facility right off the turnpike in northeast Ohio. Former GM employees are also starting to settle into their new lives, mindful of what they went through this past year.
"People are excited," said Ohio state Sen. Sean J. O'Brien, D-Bazetta Township. "Like anything, people start off a little pessimistic. We were dealt a major blow with losing the (Chevrolet) Cruze ... but people are looking at it, and they recognize this is the future. It’s exciting to see this transformational change."
Lordstown Motors is gearing up to begin production in December of the Endurance, an electric pickup aimed primarily at commercial fleet customers. The company is pushing to beat its competitors to market, one of the most difficult aspects of this endeavor, but it's doing it in a town with a rich manufacturing heritage.
Like its electric competitors Tesla Inc. and Rivian Automotive Inc., Lordstown Motors paid $20 million to acquire an old auto assembly plant and repurpose it, making this 53-year-old auto plant one of just a few to find new life in an ever-changing auto industry: building its part of the next-generation electric future.
"It’s such an unlikely part of the world to do it in, but it’s the likely place where you build things," Lordstown Motors CEO Steve Burns said Thursday from his office inside the Lordstown plant. "People just don’t think innovation comes from here. I think innovation is 90% perspiration. These people work hard here."
Building 'Voltage Valley'
Burns wants to transform the complex that built Chevrolets and other GM models for more than 50 years into what he calls "Voltage Valley." It’s a deliberate nod to the surrounding Mahoning Valley, a corner of the Rust Belt known for both its manufacturing expertise and for losing its steel mills more than 40 years ago.
To make his dream of putting the first electric truck on the road reality, Burns is working to raise $400 million, a capital investment he says is on track. He's seeking both financial investors and a strategic investor that would bring technical expertise and regulatory acumen to the project — all of which would help Lordstown Motors get to market faster.
Burns has a strategic investor in mind, but he won't reveal its identity until a deal is signed. GM, the longtime owner of the Lordstown plant, is not the strategic investor, according to a source familiar with the situation.
Meanwhile, Burns has hired a team of 50, mostly engineers, and has more than 100 contract engineers working inside the plant to prepare the production of the Endurance. The 6.2 million-square-foot facility once pumped out more than 400,000 Cruzes in a year, but Burns is shooting first for 20,000 units in 2021. He expects to be at 200,000 annually in under four years.
"I am sitting in a plant that can do twice that. I know the demand is there," Burns said. "I don’t think our competitors are going to get there for years, so all those things let us say that out loud."
Burns isn't concerned about demand for the Endurance, a truck built with such fleet customers as utility companies in mind. It's a $52,500 truck and said to be the first production vehicle that utilizes a four-wheel-drive hub-motor system, reducing the number of moving parts. There's a motor at each wheel, with no transmission or axles, making it easier to build and maintain.
The truck can go 250 miles on a full charge and get the equivalent of 75 miles per gallon. It will be showcased at the North American International Auto Show in Detroit in June. Burns expects orders for the truck to keep coming in, but he's "much more worried about the physicality of getting it done."
To get it done, he's hired Rich Schmidt, who's handled launches for Tesla, Hyundai Motor Co., Toyota Motor Corp., Volkswagen AG and Nissan Motor Co. As chief production officer at Lordstown Motors, Schmidt and his team are tasked with readying the plant and its tools to build the Endurance. They'll be reprogramming robots, retooling, reconfiguring and installing chassis, battery and motor lines.
Schmidt estimates they will be using 2 million of the 6.2 million square feet with the plan of growing into the facility: "We saw Tesla grow, and that's our goal here now."
The people on Schmidt's team include some former GM employees and other former Tesla employees. Team members who have 30 years experience on multiple automotive launches are a rare breed who seem drawn to this work.
"It’s in their blood. They have to be challenged," Schmidt said. "They have belief in that innovation. We feel this is an up-and-coming Tesla."
Burns is following the Tesla recipe. He's taken an older GM factory like Tesla did, and he's turning it into a complex that will build what he and others believe is the future of the auto industry: electric vehicles.
"It turns out there’s a reason there’s no small car companies ... it’s hard," he said. "We are pioneering a lot of new roads, but we are following a recipe that has worked."
Right now, the plant is dark and no production is happening there, but Burns said he wants that to change soon: "Every minute this is idled is not good. We want to get the workforce engaged and start building."
One year ago, the valley wasn't in the best shape. GM for years had been one of the area's largest employers before the automaker stopped production of its Chevy Cruze, a compact sedan with slumping sales. It was a year of wrenching ups and downs, of waiting to learn whether GM would put another product in Lordstown.
The answer, long suspected by employees, union officials and community leaders, came in November when the United Auto Workers finalized a contract with GM following its 40-day strike: There would be no product for Lordstown coming.
"It didn’t feel good at all," Lordstown Mayor Arno Hill said, "but we also have to realize it’s a changing world."
Hill's village lost roughly $1 million in income tax revenue each time GM cut one shift at Lordstown, but he's banking on attracting new investment to bolster depleted coffers — specifically Lordstown Motors and GM, which is building a $2.3 billion battery-cell plant right next to the Lordstown Motors plant.
The battery cells manufactured there in partnership with LG Chem are expected to power GM's all-new electric-vehicle lineup once the plant goes online in 2022. Lordstown Motors plans to initially employ 400 and GM wants to hire 1,100. Workers in both plants are likely to be represented by the United Auto Workers under separate contracts.
"I would say a lot of the anger has dissipated," Hill said. "For the most part, people are accepting it and excited that we are actually trying to bring some jobs here."
Over the course of last year, the roughly 1,400 employees who manned GM's Lordstown during the last shift have transferred to other plants. They include Matt Moorhead, 47, of Howland. He accepted a transfer to Lansing Grand River Assembly in August.
Moorhead found himself leaving his family every weekend to drive more than four hours to his new job. He endured the distance through the 40-day strike. Then one November day, while sitting in a Michigan snowstorm on his way back home, he realized it wasn't worth it.
"As much as I didn’t like the answer I got in November," he said, "it was an answer, and I could consider how to proceed with the rest of my life."
He proceeded by taking a $75,000 buyout, and now is working at a local golf course and managing his car detailing business. Moorhead worked 25 years for GM, intending to retire from there. But he's moved on and is looking ahead, much like the rest of the valley. He says it will survive, like he is.
"I kind of feel like it will work out," he said. "I know God’s plan isn’t for me to live in isolation away from my family. It’s a year I would love to forget."