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Layoffs at Navistar could affect 136 assembly workers [Springfield News-Sun, Ohio]

Sep. 7–Friday was the last day for some workers at Navistar’s Springifled location as the company expects to lay off more than 100 workers in the coming weeks.

Chris Blizard, the president of UAW Local 402, said he was told by Navistar this week that layoffs at the Springfield plant could affect as many as 136 assembly production workers over the course of the month.

“I don’t believe it will increase based on the information that I have right now. But it’s subject to change,” he said.

Lyndi McMillan, a spokeswoman for Navistar, said in an email sent to the News-Sun on Friday that final plans regarding changes at the Springfield plant have not been finalized by the company.

“We have not finalized numbers,” she said.

Last month, Navistar announced that it would be reducing production line rates at its Springfield assembly plant. McMillan said at the time that “this cycle is normal for our business, and this is not a shift of production to other locations.”

Company officials did not release which lines would be affected by the reduction. However, Blizard said the plant’s main line, which deals with medium-duty commercial trucks, will reduce the number of units it produces in a day.

Blizard said the company already reduced production on that line in August and will likely implement further changes on Monday. But, line production rates for the plant’s line two, which makes vans for General Motors, is expected to increase on Sept. 16.

It is a move Bizard said will help offset the number of employees that will be affected by the layoffs.

Navistar is a significant employer in Clark County and employs approximately 2,000 workers at its Springfield plant, which specializes in producing medium-duty commercial trucks.

Blizard said information he received from the company regarding layoffs only relates to workers represented by his chapter of the United Automobile Workers.

He said layoffs will be administered based on seniority and affected workers will retain recall rights at the plant.

Virginia Martycz, director of Clark County’sDepartment of Jobs and Family Services, said she was notified about the layoffs and her organization is working with the state to deploy a rapid response team to provide information about unemployment compensation and other resources to impacted workers.

Blizard said for 20 employees, Friday would be their last day with the company. He said layoffs will occur at the end of each week during the rest of September.

The news comes as Navistar saw a strong third quarter, in which the results of that period were released earlier this week. The company reported $3 billion in revenues due mainly to an increase in its volume of commercial trucks. Company officials project that retail deliveries of trucks and buses in the United States and Canada will be between 435,000 to 455,000 units by the end of the year.

They are also forecasting retail deliveries of 335,000 to 365,000 units in 2020, with heavy-duty trucks making up the majority of projected deliveries.

However, Steve Tam, vice president at Americas Commercial Transportation Research, said production of medium and heavy-duty commercial trucks have surpassed sales nationally. There has also been a decline in the backlog of orders waiting to be built.

Navistar’s backlogs are declining as well. And as you have seen, we are actively managing this by adjusting assembly line rates to create a balance between customer demand, inventory levels and a healthy backlog,” said Troy Clarke, Navistar’s president and CEO, in a conference call with investors Wednesday morning.

Clarke said industry orders for heavy duty-trucks have declined by 75 percent in the third quarter this year.

Tam said more than twice as many heavy-duty commercial trucks have been built over the last six months than orders for those trucks. He said numbers regarding the medium-duty truck market are less dramatic.

Since the beginning of the year, orders of medium-duty commercial trucks have been on average 15,000 units per month compared to the 19,000 trucks that are being produced on a monthly basis, according to data collected by Americas Commercial Transportation Research.

Tam said backlog orders for medium-duty trucks are declining at a much slower rate than their heavy-duty counterparts. However, he said it has caused some companies to adjust their production rates.

“When there is too much supply, as we are seeing, demand wanes. In the heavy-duty market, we have too many trucks chasing too little freight,” Tam said.

Clarke said in a conference call to investors that assembly line rates have been reduced at the company’s two truck plants.

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Bottom Line: Prepare Now for the Next Downturn

Prepare Now for the Next Downturn

Not long ago, a well-known professional wrestler had a popular catchphrase he would shout out during TV promos. “That’s the bottom line, ‘cause Stone Cold Steve Austin said so!” This meant the audience could bank on what the hulking grappler had said would come true, usually to someone else’s grief. Stealing a phrase from Mr. Austin, what’s the “bottom line” on the current economy? And is there something coming that could cause small business owners grief?

Right now, as of mid-August 2019, the line looks encouraging. Unemployment stands at a low 3.7 percent. The latest small business confidence index has fallen slightly to 103.3, but still remains historically high. The annual inflation rate for the 12 months ending in June 2019 tallied a modest 1.6 percent. Even stocks continue to rise, with the current bull market now past its 10th anniversary, making it the longest on record. One small negative blip recently appeared when the Purchasing Managers Index fell to 51.2 in July, its lowest level in three years.

If there’s one thing certain about good times, it’s that they don’t last forever. Somewhere, sometime in the future a downturn in business or some other crisis will occur. As Austin would put it, “that’s the bottom line.” History has shown it time and again. Austin made a career out of sneaking up on unsuspecting opponents and applying his dreaded “Stone Cold Stunner” with devastating results. But unlike a clueless brawler, you don’t have to be caught by surprise. Here are a few heavyweight suggestions that may ensure that even when times do get tough, you’re still standing when the match bell rings.

Don’t Cut Advertising, Publicity and Marketing – It’s always cheaper to try to wrestle new sales from existing customers than to find new ones. As a result, many small business owners believe the first department to cut in a downturn is marketing. That belief can prove fatal. True, building upon and expanding existing client relationships is never bad policy, but not going after new customers is. Without new customers continually refreshing and growing the sales pipeline, an operation quickly stagnates and ultimately shrinks or even dies. A downturn is a great time to renew marketing, advertising and publicity. For one thing, your competition may be foolishly cutting back, leaving an opportunity for you to build market share at their expense. For another, customers may be using the downturn to search for new vendors and better deals. If you’ve cut back on or eliminated marketing, you may not find them nor they you.

Recession-Proof Your Personal Credit – Just as a homeowner prepares for winter by weatherproofing a house in the fall, wise small business owners use prosperous times to ensure their personal credit can withstand tough economic times. Small business loans are hard enough to get as is, with nearly 50 percent getting denied. Those loans are even tougher to secure in a recession, as banks keep money close and become risk averse. This means you may have to use your personal credit to keep your business afloat. Do what you can now to boost your credit rating and available credit lines.

Manage Inventory, Vendors and Debt – When you’re in a hole, the first step in getting out is to stop digging. In a downturn, excessive inventory, costly vendor contracts and excessive debt can tag team your business, making a bad situation even worse. As a recession begins, take steps to reduce inventory, renegotiate vendor contracts or seek out new ones, and pare down debt. These actions will turn your organization in to a lean, mean fighting machine able to better withstand a downturn.

Focus on What You Do Best – When times are good, businesses naturally expand into new areas and diversify their offerings outside their primary area of expertise. This is a good and healthy thing. But when times get bad, these extras may drag you down. Every business has a core competency that forms the basis of their business and sets them apart in the marketplace. Focus on this strength during a downturn. If you’re a widget maker that does event planning on the side, event planning probably distracts you and wastes resources better spent on the real center of your business and earnings.

Protect and Improve Cash Flow, the Lifeblood of Your Company – It’s no revelation that in tough economic times, access to money tightens. The best way to keep your business off the mat in a recession is to keep a healthy stream of cash coming in. This means, as mentioned in the first tip, to resist the urge to drop marketing efforts that identify new customers. It also means ensuring those who have done business with you pay you for your products and services in a timely manner. In an economic downturn, businesses will naturally try to delay paying expenses and invoices if possible to keep funds on hand. A 30-day invoice can quickly turn into a request for 60 or 90 days, greatly impacting your cash flow and harming your small business’ ability to function.

In a recession, one proven method to improve cash flow and protect your business is to engage the services of a factoring company. The factoring company can fund you the amount of your outstanding accounts receivable invoices upfront, giving you the cash you need today to run your business today, and eliminating the worry and hassle of slow pay collections. You’re left free to run your business.

Invoice factoring is a convenient alternative to a traditional bank loan or fee-laden online loans. Factoring gives you the money you need when you need it with no long-term obligations. You can also get cash quicker through invoice factoring – usually within a day or two. To learn more, simply call toll-free 1-855-219-6008 or email clientsupport@chartercapitalusa.com.

Huntley & Huntley meeting set for Tuesday on Allegheny Township Marcellus well [The Valley News-Dispatch, Tarentum, Pa.]

Aug. 13–Huntley & Huntley Energy Exploration will hold a public meeting Tuesday to discuss the upcoming construction of the Porter well pad, an unconventional gas well located on private property along Willowbrook Road.

The meeting will be held at 6 p.m. at the Markle Volunteer Fire Department social hall, 470 Joyce St., Allegheny Township (Apollo if using GPS to find the location).

Residents can expect to see increased traffic and excavation on approved properties, the Monroeville-based energy company said in a meeting announcement.

Huntley & Huntley representatives will present information on the project, its duration and answer residents’ questions.

Allegheny Township and Huntley & Huntley have an excess maintenance agreement for $597,000 to pay for damage and impact to roads for the development of the Marcellus Shale natural gas well.

Some residents tried unsuccessfully to stop the development of the well. The case went to the State Supreme Court, which declined to hear it, letting a lower court ruling stand that allowed the well pad project to go forward.

Allegheny Township property owners asked the state Supreme Court to review the Commonwealth Court ruling that they believe infringed on their “fundamental and constitutionally protected property and environmental rights.”

Mary Ann Thomas is a Tribune-Review staff writer. You can contact Mary at 724-226-4691, [email protected] or via Twitter .

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Prices are still falling at Valley gas pumps. Here’s where the lowest fuel prices are [The Fresno Bee]

Aug. 12–Gasoline prices in Fresno and the Valley are continuing to fall since reaching a sticker-shocking peak several months ago.

The average price on Monday for regular unleaded gasoline in the Fresno area was $3.60 per gallon, according to AAA Gas Prices. That’s down by about a nickel since last week, and about 13 cents lower than a month ago. It’s also 48 cents less per gallon than in early May, when refinery shutdowns for maintenance sent prices soaring to $4.08.

Pump prices vary from one station to another in various markets; the figures reported by AAA represent an average across all stations.

Besides being lower than a week ago and a month ago, Fresno’s average price is also lower — but just barely — than prices at this same point last year. On Aug. 12, 2018, AAA reported the average for regular unleaded at $3.63 per gallon.

GasBuddy.com, a mobile app and website that tracks retail fuel prices at stations across the country based on real-time reports from customers, showed that the lowest cash prices for regular unleaded gasoline in the Fresno area on Monday were $3.15 per gallon at several locations: Costco membership stores on North Abby Street in north Fresno and the store in Clovis, and a 76 station off Herndon Avenue and Highway 99 in northwest Fresno.

Costco in Hanford also had regular unleaded gasoline priced at $3.15 per gallon, GasBuddy users reported, while Visalia’sCostco had the price at $3.09. A Fastrip convenience store in Tulare was selling gasoline for $3.01 per gallon.

The lowest prices in the Valley reported by GasBuddy users on Monday, however, were in and around Lemoore in Kings County. Several stations on the GasBuddy map were selling gasoline for under $3 per gallon, including $2.81 at a Fastrip store at 18th Avenue and Cinnamon Drive, $2.83 at a Sinclair station at Armstrong and D streets, and $2.85 at the Yokut Gas station near the Tachi Palace Hotel and Casino at Jersey and 17th avenues.

California’s statewide average price was reported at $3.62 per gallon on Monday. Nationally, the U.S. average continues to be well below California, at $2.65 per gallon, according to AAA. GasBuddy.com showed the national average at $2.63 per gallon — the lowest level so far this summer after a price drop of almost seven cents over the past week, said Patrick DeHaan, head of petroleum analysis for GasBuddy.

Not only are prices nationwide the lowest of the summer, DeHaan said in a blog post Monday, they are “the lowest since March as gas stations pass along the recent drop in prices brought on by the U.S./China trade rift.”

Demand for gasoline by drivers has gone up over the past week, “but it wasn’t enough to stay on pace with the huge jump in gasoline stocks,” said Jeanette Casselano, a AAA spokeswoman. “Therefore, pump prices continue to decline across the country.”

AAA reported that gasoline stocks across the West Coast as of Aug. 2 grew by about a half million barrels from the previous week, and sits at about 1.3 million barrels more than a year ago, “which would help prices stabilize if there is any disruption in supply or any increase in gas demand in the region this week,” the AAA analysis stated.

DeHaan, the GasBuddy analyst, said that global developments could drive prices up or down moving forward. “The drop in gas prices could slow in the weeks ahead as some OPEN members talk about cutting oil production to stem the recent drop in prices,” he said. He noted that crude oil prices had wobbled down and up over the past week, including a $3 per barrel increase as OPEN discussed production cuts.

“However, a production cut from oil producers may be more akin to putting lipstick on a pig as oil markets have plenty of downside ahead” as the summer driving season comes to an end and driver demand for gasoline drops, DeHaan added. “The U.S. national average could fall an additional 35 cents per gallon by Thanksgiving even after this week’s drop, should the trade tensions and geopolitical risks remain the same.”

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Chaplin parties pick their slates [The Chronicle, Willimantic, Conn.]

Aug. 12CHAPLIN — Incumbent Republican Chaplin First Selectman William Rose IV will seek another term in office, but he faces a challenger in Democrat William Hooper.

Recently completed party caucuses have cemented a competitive race for the town’s top spot in November.

Rose served as first selectman from 2009 to 2015 after being on the board of finance and the board of selectmen.

He formerly owned W.H. Rose Inc., before selling it and becoming a consulting director for the truck sales business.

In 2015, he decided to remain involved in Chaplin government to a lesser extent, and sought and won a seat on the board of selectmen instead, planning on a partial retirement.

He was succeeded as first selectman by Matthew Cunningham, who won reelection in 2017.

But, in 2018, Cunningham resigned midterm for personal reasons and Rose agreed to be appointed to the top seat again for the remainder of Cunningham’s term.

Rose, whose father served on the board of selectmen before him, said he was willing to run for another term in order to see various municipal projects to completion.

“I want to carry on the stuff we’ve been doing, and get this town to a real good place,” Rose said, referencing improvements to the Bedlam Road Bridge and England Road proposals.

He also spoke of regionalizing some services he and Selectman Joseph Pinto are currently exploring. ” I want to get those projects underway. This is not my father’s board of selectmen. The first selectman is running a multimillion dollar corporation,” Rose said. “I love this town and I’ll be here for the rest of my life. I feel I’m the most qualified candidate at this time.”

Hooper is a wildnernesstrained emergency medical technician and a member of the Chaplin Volunteer Fire Department.

“It’s an honor to be nominated, especially for an office I would never had considered even five years ago,” said Hooper, who is currently a member of the board of education.

” Being on the board of education opened my eyes, though, to how much locallevel representatives can actually do that helps people, and it also led to me eventually spending a year as the Chaplin Board of Education representative on the dissolution committee for Regional School District 11,” Hooper said.

” That, in turn, cemented my support for Parish Hill, as I dug into numbers on quality and cost, which reinforced again how much impact local political decisions have on

CHAPLIN, Page 4

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Lordstown Motors visits northeast Ohio to discuss idled GM plant [The Detroit News]

Aug. 10–If Lordstown Motors Corp. is able to finalize its purchase of the General Motors Co. assembly plant in northeast Ohio, the start-up automaker plans to start producing an electric truck there as early as next year.

Lordstown Motors continued its behind-the-scenes efforts on purchasing the GM plant by meeting with Mahoning Valley officials on Friday at Youngstown State University to introduce the company and explore opportunity for collaboration with the university. The project is contingent on the would-be automaker purchasing the plant after GM and the United Auto Workers complete negotiations on a new contract as early as next month.

“They feel as if with their singular focus on the electrical vehicle that they should be able to be a real force in the market … the market that’s inevitable,” Youngstown State University President Jim Tressel told The Detroit News. “They truly want to be a part of the community and the region.”

The News reported last week that Lordstown Motors was founded in June by CEO Steve Burns, who also founded and was CEO of Workhorse Group Inc., a Cincinnati-based electric-truck maker. Lordstown Motors would use the Workhorse technology to build its electric pickup truck at the 6.2 million-square-foot facility that pumped out Chevrolet and Pontiac cars for years. Workhorse would own 10% of Lordstown Motors.

The plant also would potentially partner with Workhorse to build the next U.S. Postal Service delivery truck. Workhorse is one of the companies vying to win by the end of year a $6.3 billion contract with USPS to build 180,000 delivery trucks. Access to the Lordstown facility is expected to be a “game changer” for Workhorse in its efforts to get the contract, CEO Duane Hughes said during the company’s second quarter earnings call this week.

In addition to being an assembly facility, the plant would also become Lordstown Motors’ headquarters and research and development center. Burns could not be reached for comment Friday.

Lordstown Motors’ presence in the Mahoning Valley on Friday, as well as discussions with stakeholders there before the meeting, has helped turn skepticism about the company into excitement.

“They are the real deal,” said Rick Stockburger, CEO of the Tech Belt Energy Innovation Center, a business incubator in Warren, Ohio. “The team they have there has worked for companies like Tesla and GM. This isn’t some random startup company. They have a real knowledge of the ecosystem.”

Lordstown Motors, though, still has some hurdles to overcome. It needs to find out what comes of the UAW/GM negotiations because GM cannot idle, close or sell the plant under the current collective bargaining agreement expiring Sept. 14. The UAW officials say they will fight to keep GM product in the automaker’s “unallocated” plants in Lordstown, Michigan and Maryland. Lordstown Motors is willing to work with the UAW, multiple sources said.

Lordstown Motors is also working on getting the rest of the financing needed to purchase and retool the plant. “Their willingness to be up here and to bring their team up here sends a strong message,” said Ohio Sen. Sean O’Brien, D-Bazetta Township, who visited the Workhorse headquarters outside Cincinnati last week.

Workhorse develops electric delivery vans and pickup trucks. The company also has developed hybrid aircraft for short flights and delivery drones.

There’s been skepticism about Workhorse since President Donald Trump announced on Twitter that GM was working with the company to sell the Lordstown plant — even though Workhorse wouldn’t be the company purchasing the plant from GM. Lordstown Motors would be.

Skepticism among locals and some in the news media is driven in part by Workhorse’s weak earnings and uncertain financial outlook. This week, the company reported $37 million in losses and only $6,000 in sales during the second quarter. In a Friday filing with the Securities and Exchange Commission, the company said it lost $43.1 million for the first six months of the year.

The company’s sales were down about 50% year over year to $369,690, primarily attributable to a decrease in the volume of trucks sold. As of June 30, Workhorse’s cash, cash equivalents and short-term investments totaled $23.5 million, up from $1.5 million on Dec. 31.

khall@detroitnews.com

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50, 30, 20 are the keys to financial success. But what do they mean?

Invoice Factoring Companies for Small Business

Aug. 2–Financial expert Alexandra Ramírez recommends a tactic for saving that not only grows your bank account, but leaves you with a sense of well-being.

“The easiest way is to make an automatic transfer from your checking account to the savings account. Even if you start with a minimum amount of $25, in the future you can increase,” says Ramírez. People feel motivated by seeing the progress, she says.

Ramírez, author of the book “Conquer Financial Wealth in 21 Days,” mixes important concepts with a practical touch. Among them is the formula of 50, 30, 20, which she considers key to organizing personal finances.

— 50 percent of a person’s income should be distributed to cover the necessary and basic expenses such as food, gasoline, transportation and housing.

— 30 percent is for personal and entertainment expenses, such as the gym, clothes, outings.

— 20 percent is the ideal amount to be saved from salary.

Miami’s high cost of living makes this a difficult formula to follow. Ramírez suggests eliminating small daily expendable expenses that accumulate and drain the monthly budget — such as the $5 cup of coffee, impulse-purchase drinks at the supermarket, daily lunches out.

The key, she says: Start with small steps, so you can see that sacrifice pays.

Ramírez, CEO of Financially Fit Latina, is the organizer of the first ExpoFinanzas Mujer, a Spanish-language finance and business summit for women scheduled for Aug. 3 at Florida International University.

The event aims to empower women financially and offer business tools needed to start their own businesses.

The daylong seminar includes presentations by 18 speakers in such topics as sales negotiation and digital marketing. Bank representatives and experts from the Small Business Administration and Social Security Administration will be on hand. Entry to the show expo is free; admission to conference sessions is $60.

Details: ExpoFinanzas Mujer 2019, Aug. 3, from 8 a.m. at 5 p.m., at Florida International University, Graham Center Ballrooms, 11200 SW Eighth St. Register at www expofinanzasmujer com, expofinanzasmujer@gmail com and 786 – 261 – 3924.

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Coal-fired power plants going way of dinosaur [Houston Chronicle]

Aug. 7–Coal-fired power plants are being replaced by more efficient and cheaper sources of power, mostly because of an abundance of low-priced natural gas.

Growth in shale gas production has more than cut the average cost of natural gas for electricity producers in the past decade, which has led to an increase in gas-fueled electricity production, according to a study by the Norwegian research firm Rystad Energy.

Rystad forecasts that natural gas-fueled electricity generation will reach a record 38 percent share of total U.S. electric power generated this year. That is nearly 2.5 times what it was in 2008.

Rystad also predicts that natural gas prices will remain low for the next couple of years.

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Permian players Diamondback, Pioneer, Parsley increase production, tighten spending [Houston Chronicle]

Aug. 7–Some of the top oil producers in the booming Permian Basin reported mixed financial results Tuesday as they seek to appease Wall Street with reined in spending and stronger oil and gas production volumes.

A lot of the top Texas independent shale players are feeling the crunch with subdued oil prices and Wall Street now demanding more efficient spending and stronger cash flow after years of companies spending big in order to grow.

Midland-based Diamondback Energy, Dallas’Pioneer Natural Resources and Austin’sParsley Energy all said Tuesday that they’re lowering the top end of their 2019 capital spending projections while achieving oil and gas production volumes above or near the top of their guidance.

Diamondback, one of the fastest-growing Permian firms after making a series of multibillion-dollar acquisitions last year, reported a quarterly net income of $349 million that jumped nearly 60 percent from the year prior.

After acquiring smaller Permian firms Energen and Ajax Resources last summer, Diamondback essentially doubled its quarterly revenues up to more than $1 billion. The company will complete more wells in 2019 than its previous estimates while lowering the maximum of its capital budget.

The snake-themed Diamondback is reducing its debt load by spinning off its pipeline and processing facilities into the brand-new Rattler Midstream Partners business and by selling more of its mature acreage to its oil and gas minerals business Viper Energy Partners.

Dallas-based Pioneer, on the other hand, is aiming to right the ship after replacing its chief executive and cutting more than 500 jobs this year.

Pioneer posted a $169 million loss in the second quarter, which is down from a $66 million profit a year prior. But much of that loss comes from about $150 million in one-time restructuring costs associated with the job cuts.

In May, Pioneer became a Permian pure-play firm by selling its Eagle Ford assets in South Texas to Houston startup Ensign Natural Resources for about $475 million.

Pioneer CEO Scott Sheffield said the company’s production output is above guidance thus far for the year and that it is lowering the top end of its 2019 capital budget by $150 million, or nearly 5 percent.

“Pioneer reported an excellent second quarter, with significantly reduced capital spending, strong production growth and superior margins,” Sheffield said.

REFINING: Lower chemical prices hurt Westlake’s profits

The company plans to maintain operating up to 23 drilling rigs in the Permian for the rest of this year.

Austin-based Parsley said it will scale back from 12 rigs in the Permian to 11 because its drilling efficiency is on the rise.

Parsley’s quarterly profit of $116 million was down slightly from $119 million last year, but its revenues jumped from $468 million to $499 million.

As the other companies reported, Parsley is hiking its 2019 production targets while tightening up its capital spending slightly.

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Potential buyer of GM’s Lordtown plant reports dismal earnings. Will it impact sale? [Detroit Free Press]

Aug. 7–The company billed as a potential savior of General Motors’Lordstown Assembly plant reported disappointing second-quarter results, but GM said talks continue toward purchasing the shuttered factory.

Workhorse Group Inc., an electric truck maker, said it generated just $6,000 in sales during the three months ended in June, Bloomberg reported. That’s down from about $171,000 a year earlier. Workhorse, based in metro Cincinnati, said its shipments of electric trucks came to a standstill.

In May, Workhorse said it was in talks with GM to create a new entity that would buy Lordstown, which had built the Chevrolet Cruze car until March, when GM discontinued the car and idled the line.

Despite Workhorse’s dismal earnings, GM indicated it would not derail its discussions to sell Lordstown. GM issued the following statement to the Free Press on Tuesday:

“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. Discussions continue to move forward in a positive direction. We continue to focus our efforts on securing a final agreement.”

As of late last week, GM said a deal was edging closer to reality.

“Workhorse, which is going to be an investor in the new company that would buy Lordstown, raised money quite successfully to help them fulfill their order backlog for the commercial electric vehicles they build,” GM spokesman Jim Cain told the Free Press.

Cain said raising that money is good news because it makes Workhorse’s core business stronger, giving the new company an ability to acquire the plant. Cain said discussions continue and “things are moving forward in a good direction,” but he declined to put a time frame on a possible deal, noting that the UAW would have to approve it first.

Workhorse shares plummeted 26% to $2.96 during trading Tuesday. Bloomberg reported that Workhorse CEO Duane Hughes said the company has $70 million in back orders that its factory in Union City, Indiana, will handle. But the Lordstown plant’s size at 6.2 million square feet and experienced workforce could bode well for Workhorse’s bid to win a possible $6.3 billion contract with the U.S. Postal Service. That contract would be to build 180,000 electric mail trucks.

“We view the plant as a potential game changer for the postal service contract,” Hughes said in Bloomberg’s article.

Lordstown employed 1,600 when GM announced in November it would idle its assembly plants at DetroitHamtramck, Lordstown and Oshawa in Ontario by 2020. It also said it would shutter the Baltimore and Warren transmission plants, the latter of which closed last week.

GM said it has transferred about 700 Lordstown UAW workers to jobs in other GM plants, mostly out of state.

In May, in a tweet, President Donald Trump declared Workhorse would be the savior of thousands of lost Ohio jobs at the shuttered Lordstown facility.

“GREAT NEWS FOR OHIO! Just spoke to Mary Barra, CEO of General Motors, who informed me that, subject to UAW agreement etc., GM will be selling their beautiful Lordstown Plant to Workhorse, where they plan to build Electric Trucks,” Trump tweeted. “With all the car companies coming back, and much more, THE USA IS BOOMING!”

But Workhorse was low on cash. Last year, Workhorse generated sales of $763,000. The company also lost $36.5 million. A day before Trump’s tweet, Workhorse told regulators it could soon be insolvent.

It is common for a startup to lose money. Workhorse does have a significant customer base and has made leadership changes. It also shifted its focus on bringing a new electric cargo van to market to fulfill a backlog of orders.

In June, Workhorse said it secured $25 million for research and development toward its next generation of electric vehicles.

In the proposal to GM, Workhorse would have close to 10% interest in a new venture being assembled by Workhorse’s founder and former CEO Steve Burns. The name of the entity and any other potential partners have not been disclosed. The entity would need to raise at least $300 million to buy the plant, retool it and launch production, Burns has said.

Contact Jamie L. LaReau: 313-222-2149 or jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter.

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