Since Workhorse Group manufactures electric vehicles, the investors assumed that the contract was already a done deal. The class action lawsuit alleges that the statements implied that USPS has already decided to use an electric vehicle as the company’s delivery van. The individuals in question were Duane Hughes, Workhorse Group’s CEO, and Steve Schrader, Workhorse Group’s Chief Financial Officer. The complainants assert that two important figures from the Workhorse Group were interviewed by the media and released misleading statements. The deceptive claims were related to Workhorse Group’s efforts to bid a contract with the U.S. However, the false claims and bid fell off, resulting in a significant loss of money for the investors. The class action lawsuit was filed by investors against Workhorse Group in March 2021 in a California federal court.Īccording to the plaintiffs, the company has made misleading public statements that influenced the investors to finance the company. But by November of last year, GM announced plans to stop production, costing Lordstown the last of the roughly 4,500 direct jobs the plant provided just a few years ago.Consumer Class Actions Workhorse Group USPS Contract Class Action Lawsuit – Investors Lost Thousands…īy Consider The Consumer on Investors Sue Workhorse Group Over Deceptive Contract ClaimsĪmerican manufacturing company, Workhorse Group, was charged with a class action lawsuit by its investors due to alleged misleading, false claims made by the company. Discussions are moving forward, and the company said it remains focused on securing a final agreement.ĭuring a July 2017 rally in nearby Youngstown, Trump told supporters “don’t move, don’t sell your house,” because his administration would bring jobs back and fill up the area’s factories. “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. But the United Auto Workers’ local president told Bloomberg News he was unaware of the discussions, and the union issued a statement calling for GM to assign a new product to the plant and keep operating it. Trump preempted GM and Workhorse’s announcement of their talks in May by more than an hour by sending celebratory tweets and thanking GM CEO Mary Barra. The company believes demand from other customers will make the project feasible. Tom Colton, an outside spokesman representing Workhorse, said its plans for Lordstown aren’t contingent on winning the Postal Service contract.
Burns told the Detroit News last week that he’s looking to raise $300 million to back the effort. Workhorse would in turn own a minority stake in Lordstown Motors.
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The company would license intellectual property and technology to produce an electric truck based on Workhorse’s W-15 model. Under the proposed deal being discussed with GM, Workhorse’s founder and former CEO, Steve Burns, would form a new private company called Lordstown Motors Corp. Deliveries will resume in the fourth quarter. Workhorse has about $70 million in back orders for its electric vehicles, though its factory in Union City, Indiana, will handle much of that work. He said getting access to the plant could be a “potential game changer” in winning the Postal Service contract potentially worth upwards of $6.3 billion.
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“They’ve got 50-plus years of experience on how to build vehicles in that facility,” Chief Executive Officer Duane Hughes told analysts on an earnings call.
While it’s hard to imagine at this juncture the company having the capital needed to get GM’s factory humming again, it has a ray of hope to point to: a potentially lucrative contract to build next-generation mail trucks for the U.S. Now more than ever, Workhorse looks more like Lordstown’s lottery ticket than a savior to be taken seriously. The company’s stock plunged, sinking as much as 35% and dropping its market value to less than $200 million. The electric-truck maker’s sales, never really robust at any point in its 12-year history, totaled all of $6,000 in the quarter. The plan was met with immediate skepticism, and Workhorse’s second-quarter earnings report Tuesday further doused the optimism. Hundreds of jobs would be saved, in other words.
was in talks with a company called Workhorse Group about forming a new affiliate that would buyーand re-openーthe shuttered Chevrolet Cruze car plant in Lordstown. Back in early May, President Donald Trump blasted out a tweet one morning under the banner “great news for Ohio.” The great news? General Motors Co.
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