Workhorse sued in US court in Calif.
Officials continue to ask Biden to step in, stop USPS award
Investors in Workhorse Group Inc. allege in a lawsuit that executives there made misleading and false statements concerning the company’s bid to secure a multibillion contract to build the U.S. Postal Service’s next-gen delivery truck.
And on Tuesday, U.S. Rep. Tim Ryan doubled-down on his previous urging of President Joe Biden to halt the more than $6 billion contract award to a Wisconsin-based company until a review is complete.
The class-action complaint filed in federal court in central California claims Workhorse CEO Duane Hughes and Chief Financial Officer Steve Schrader misrepresented the company in media interviews and failed to disclose the company was “merely hoping” the postal service would pick an electric vehicle and had “no assurance or indication” from the postal service that was the case.
Also, the two kept quiet a point — revealed by U.S. Postmaster Louis DeJoy in explaining the decision not to select an electric vehicle — that electrifying the USPS’s fleet would be “impractical and astronomically expensive,” the lawsuit states.
In addition, the lawsuit alleges as a result, the market price of Workhorse stock was artificially inflated.
Workhorse released the statement, “We believe these claims are entirely without merit and intend to defend ourselves against this litigation.”
DeJoy announced Feb. 23 that Wisconsin-based Oshkosh Defense, a division of Oshkosh Corp., won the 10-year contract worth about $6 billion to make up to 165,000 new delivery trucks for the postal service.
In competition for it was Cincinnati-based electric-truck manufacturer Workhorse Group Inc., which holds a 10 percent stake in Lordstown Motors Corp. Its factory in Lordstown, the former General Motors assembly plant, likely was the location to manufacture the Workhorse delivery trucks.
Workhorse stock tumbled upon the news, but since has rallied some after some Democratic lawmakers, including Ryan, D-Howland, introduced legislation giving the postal service $6 billion to replace a large chunk of its fleet with electric-delivery vehicles.
The bill, introduced by U.S. Rep. Jared Huffman of California, would require at least 75 percent of the new fleet to be electric or zero-emission vehicles. Ryan is a co-sponsor.
DeJoy previously told a House committee the new postal truck fleet would be 10 percent electric. The remaining vehicles would be equipped with fuel-efficient internal combustion engines, according to the postal service.
Last week, Ryan; U.S. Rep. Marcy Kaptur, D-Toledo; and U.S. Sen. Sherrod Brown, D-Ohio, wrote President Joe Biden, urging him to halt the contract. The trio want a review done to determine if inappropriate political influence factored in the award and whether the contract is consistent with Biden’s call to electrify the U.S. government’s fleet of vehicles.
Ryan and Kaptur on Tuesday repeated their call to the administration for a pause, introducing a resolution co-sponsored by Ryan and Huffman to do so.
On Monday, Ryan called on the U.S. Securities and Exchange Commission to investigate a $54 million purchase of Oshkosh Corp. stock less than 24 hours before DeJoy’s announcement, according to a release from his office.
A spokeswoman with Oshkosh did not return an phone call or email seeking comment Monday.
The lawsuit against Workhorse, filed Monday, seeks unspecified damages to be determined at trial. It also asks the court to declare the lawsuit a proper class action.