GM Loans Lordstown Plant Buyer $40 Million
General Motors has extended an open-ended, mortgage-like $40 million loan to the buyer of its sprawling auto plant in Lordstown, Ohio. The deal includes an option for GM to buy back the entire facility.
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General Motors has extended an open-ended, mortgage-like $40 million loan to the buyer of its sprawling auto plant in Lordstown, Ohio. The deal includes an option for GM to buy back the entire facility six months from now.
The unusual arrangement, reported earlier this week by the Youngstown, Ohio-based Business Journal, also gives GM an option to lease 900,000 sq ft of space inside the plant and 400,000 sq ft of land elsewhere on the site between now and April 1.
A Helping Hand
The deal definitely helps tiny electric vehicle startup Lordstown Motors Corp. The company hopes to begin building its electric pickup truck, the Endurance, in a portion of the giant Lordstown complex, which once built Chevrolet Cruze midsize sedans, by next autumn.
The financing scheme adds a new element in the drama that has swirled around the 6.2 million sq-ft plant since GM announced late last year it was closing facility and four others in North America to rebalance capacity and free up funds to develop electrified vehicles.
That move raised the ire of President Donald Trump, who demanded that GM reconsider or find another use for the 53-year-old plant. His interest in the factory, which employed 4,500 people at its peak, was no fluke. During a rally speech there in 2017, he counseled local residents not to sell their houses because of the jobs he would soon bring back to the area.
GM sold the Lordstown plant to Lordstown Motors for $20 million, according to The Business Journal, which cites a local deed filing. The new owner hasn’t indicated how many people it will employ there. But its staff will be considerably smaller than the 1,500 GM fired when it ended assembly operations there in March.
GM at least partly soothed Trump and Ohio officials last week by unveiling a 50:50 venture with South Korea’s LG Chem to open a $2.3 billion electric-car battery factory in Lordstown. The facility will employ 1,200 people.
GM tells The Business Journal it hasn’t finalized a site plan for the battery factory. The company is being coy about whether there is a connection between that project and its option to lease space at the old Lordstown plant.
Honda is an engine company.
By James Gaffney, Product Engineer, Precision Grinding and Patrick D. Redington, Manager, Precision Grinding Business Unit, Norton Company (Worcester, MA)
Although the term “continuous improvement” is generally associated with another company, Honda is certainly pursuing that approach, as is evidenced by the Accord, which is now in its ninth generation.