Trump's 'Great News' For Shuttered GM Ohio Plant Is In Real Trouble

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Less-than-stellar profits for Workhorse, Ford playing with different sales models, Tesla getting served a cease-and-desist and more await you in The Morning Shift of Wednesday, Aug. 7, 2019.


1st Gear: Workhorse Not Working Out So Great Still

When General Motors announced it would shutter five North American plants and cut thousands of jobs it included the Lordstown Assembly plant in Warren, Ohio. Months later, we reported Workhorse, an electric truck company based in Ohio, was in preliminary discussions to buy and re-open the plant. Donald Trump called it “great news for Ohio,” despite the company appearing to hemorrhage money.

Well, Workhorse’s second-quarter earnings report didn’t reveal anything positive. The company’s sales only totaled about $6,000 during the quarter, reports Bloomberg, which works out to about $70 a day. Workhorse stock fell, the outlet went on, dropping 30 percent and lowering market value to under $200 million.

There is some hope that Workhorse could potentially secure a contract to build mail trucks for the U.S. Postal Service, but the plans for Lordstown “aren’t contingent on winning the Postal Service contract. The company believes demand from other customers will make the project feasible,” a Workhorse spokesperson said.

Bloomberg notes Workhorse sales have never really been “robust” in its 12-year history.

As for General Motors, it told Bloomberg:

“As we’ve said before, our potential agreement with Workhorse and an affiliated, newly formed entity to sell the Lordstown complex can bring significant production and electric vehicle assembly jobs to the Lordstown plant,” GM said in an emailed statement. Discussions are moving forward, and the automaker said it remains focused on securing a final agreement.


We’ll see what fate ultimately awaits the Lordstown plant, but that this point I’m still pretty skeptical of Workhorse.

2nd Gear: Just Another Step Toward Direct Sales

Tesla famously uses a direct sales model, which is a radical shift away from how traditional automaker sell cars through dealerships. But now that car sales are slumping, automakers are testing out alternative methods of selling. Ford is one of them.


The number of new-car dealerships fell last year in the U.S., so Ford is trying to counter the trend by opening storefronts in malls, reports the Detroit News.

From the story:

Under the direction of Elena Ford, chief customer experience officer, the Dearborn automaker is testing “Smart Labs” in four locations outside the United States. While local dealers typically have displayed a car or two in the halls of shopping malls, this takes it a step further.

Ford’s Smart Labs — spun off an idea from a dealer in Turin, Italy — are essentially satellite storefronts for local dealerships. They function much like the showrooms made popular by Tesla, which opened a small storefront in Troy’s Somerset Collection. The idea is to put the brand and the vehicles in front of people who might not have left the house that day thinking about buying a car.

The storefronts or stands house a few Ford vehicles. Employees can answer questions and pass leads to salespeople. Passersby are able to test-drive vehicles parked outside in some locations.


And despite the widely reported death of the shopping mall, Ford says its satellite storefronts could pop up elsewhere. Somewhere with a lot of foot traffic and people are in the buying mindset. If cars start showing up in grocery stores, so help me God........

Honestly, this just sounds like one step closer to using a direct sales model. I don’t think the dealership system will ever truly go away, but maybe in the future, automakers will adopt some sort of hybrid method that uses both dealers and these satellite storefronts.


3rd Gear: NHTSA Vs. Elon

On Oct. 7, Tesla penned a blog post about how the Model 3 “achieve[d] the lowest probability of injury of any vehicle ever tested by NHTSA.” The government agency apparently took issue with Tesla’s claims and sent it a cease-and-desist letter last year, according to Bloomberg, citing “documents posted by a nonprofit advocacy group.”


From the story:

NHTSA lawyers took issue with an Oct. 7 Tesla blog post that said the Model 3 had achieved the lowest probability of injury of any vehicle the agency ever tested, the documents released Tuesday by the legal transparency group Plainsite show. The regulator said the claims were inconsistent with its advertising guidelines regarding crash ratings and that it would ask the Federal Trade Commission to investigate whether the statements were unfair or deceptive acts.

The documents, obtained through a Freedom of Information Act request, also include orders for information that NHTSA sent to Tesla following several crashes, including a fatal March 1 crash involving a Model 3 operating on Autopilot. Tesla shares fell 0.5% in New York pre-market trading to $229.51.


Tesla’s deputy general counsel responded the company “respectfully disagreed” with NHTSA. “Tesla has provided consumers with fair and objective information to compare the relative safety of vehicles having 5-star overall ratings,” he said.

Because, like, what else is he supposed to say?

We’ll if this goes anywhere further.

4th Gear: Germany Retrofitting Old Benz Diesels

Well this is sort of neat. As more and more cities propose diesel bans, Daimler has a solution of sorts. It’s a little unreasonable to expect people to scrap their perfectly working cars and buy a new one because of new and strict regulations, so the German automaker is letting people apply for a subsidy to upgrade their older diesel cars, reports Reuters.


From the story:

Daimler (DAIGn.DE) said on Tuesday Mercedes-Benz customers in Germany could apply for a 3,000 euro ($3,350) subsidy to upgrade the exhaust filters of older, polluting diesel vehicles, the latest effort among German carmakers to avoid inner-city bans.

The first retrofit kit for Mercedes cars with “Euro 5” diesel engines, including the best-selling E220 and E250 models, has been developed by Dr Pley SCR Technology, a Bavaria-based, family-owned business.

It will cost around 3,000 euros to buy and install.

This certainly sounds cheaper than buying a whole new car. Hopefully the program will spread to more models and other automakers so people can save some money and still be more environmentally conscious.


5th Gear: Indian Auto Industry Not Looking Great

The global automotive sales slump is hitting India, and hard, according to Reuters. Thousands of workers have been laid off.


From the story:

The cull has been so extensive that one senior industry source told Reuters that initial estimates suggest that automakers, parts manufacturers and dealers have laid off about 350,000 workers since April.

Within this previously unreported figure, car and motorcycle makers have laid off 15,000 and component manufacturers 100,000, with the remaining job losses at dealers, many of which have closed, the industry source said.


The automotive industry accounts for over seven percent of India’s GDP and it’s facing one of its worst downturns ever. Reuters estimates over 35 million people could be indirectly or directly affected by the slump.

“There is little sign of a revival,” the outlet reports grimly.

Not good at all.

Reverse: There’s A War Going On, People


Neutral: Do You Think Workhorse Will Save Lordstown?

Or do you think the plant is done for?



Of course GM wants them to put their truck into large scale production. It would be the only truck in the market that looks worse than the Silverado.