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Friday, 09 August 2019 20:43

Postal Service Decision Could Mean Thousands of Jobs in MI and Ohio

Written by Jamie L. LaReau, Detroit Free Press
The Buick City assembly plant in Flint, MI, is shown Monday, July 23, 2001. The Buick City assembly plant in Flint, MI, is shown Monday, July 23, 2001. Carlos Osorio/Associated Press

Index

A decision expected by year’s end from the U.S. Postal Service could be a big factor in whether thousands of automotive jobs land in Michigan or go somewhere else.

 

Two companies among the finalists to win a lucrative deal for 180,000 next-generation mail delivery trucks are separately eyeing the former Buick City facility in Flint, MI, and General Motors' (GM) Lordstown Assembly in Ohio to build the trucks and other vehicles.

 

That could mean 2,000 jobs or more for Flint and at least "several hundred jobs" in Lordstown. People involved in the discussions say both projects could go forward even without the postal business, but the huge contract, reported to be worth $6.3 billion, clearly could tip the scales from "maybe" to reality.

 

Mahindra Automotive North America Inc., an India-based automaker, is looking to buy the Flint site.

 

Lordstown Motors, linked to Cincinnati-based electric-vehicle manufacturer Workhorse, is in talks with GM to buy the idled GM Lordstown plant.

 

Buick City Rebirth

 

In June, Mahindra Automotive North America signed a nonbinding letter of intent with the trust that is in charge of redeveloping the site owned by the pre-bankruptcy GM. The 235-acre complex popularly called Buick City was shuttered during the company's 2009 bankruptcy. In its prime, the factory once employed 27,000 people.

 

Earlier this year, Fiat Chrysler Automobiles received $92.8 million worth of local and state development subsidies to offset the cost to convert Mack Avenue Engine into an assembly plant.

 

Mahindra is backed by a $20.9 billion group of companies.

 

"Phase one could be 2,000 jobs or more with additional phases to follow," said Ansell.

 

The Finalists

 

According to a statement on the USPS website, the agency awarded $37.4 million in contracts in September 2016 to six suppliers to produce 50 prototype mail vehicles. The finalists can work with other suppliers to create models featuring new technology and hybrid and alternative fuel variants.

 

There are now reportedly five finalists:

 

  • Mahindra
  • Oshkosh Corp. and its partner Ford Motor Co.
  • AM General
  • Karsan Otomotiv and its partner Morgan Olson of Sturgis.
  • VT Hackney Inc. and its partner Workhorse.

 

Morgan Olson makes walk-in vans and it reportedly has had a longstanding relationship with the USPS. Turkish truckmaker Karsan will provide the hybrid technology and Morgan Olson will build the body, reports say.

 

Lordstown Labor Pool

 

In May, GM announced it was in discussions with Workhorse and an affiliated, newly formed entity called Lordstown Motors to sell the company’s Lordstown Complex.

 

Such a deal would potentially bring significant production and electric vehicle assembly jobs to the plant, said GM spokesman Dan Flores, who insisted that a deal is not dependent on Workhorse winning the USPS contract.

 

"Workhorse has some very innovative technology that Lordstown can capitalize on," said Flores.

 

Workhorse founder and former CEO Steve Burns has said "several hundred jobs" would be created and the first vehicle planned for production "if we were to purchase the Lordstown complex would be a commercial electric pickup, blending Workhorse’s technology with Lordstown’s manufacturing expertise.”

 

GM had been reported to be in talks with electric-vehicle startup Rivian, based in Plymouth, MI, to build an electric pickup. But earlier this year, those rumored talks fizzled. Instead, Amazon and Ford agreed to invest in Rivian.

 

While Workhorse has raised money for research and development and to help it run its core business, Lordstown Motors still needs to raise about $300 million to buy the plant, retool it and launch production, said Burns.

 

"There is work to be done, but talks are continuing," said Flores. "Our efforts are focused on continuing to move the deal forward and reaching that final agreement."

 

We thank the Detroit Free Press for reprint permission.

 

 

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