Workhorse Group CEO Rich Dauch has jettisoned the company’s chief financial officer and chief operating officer, his latest housecleaning moves as he seeks to fix production, product and processes at the electric truck manufacturer.
The latest departures follow a recall of the only 41 C-1000 electric delivery vans the company has manufactured. Dauch has halted the production of more vans while engineering changes are made.
The safety defect, which has yet to appear on the National Highway Traffic Safety Administration website, could acknowledge the company misrepresented some aspect of the C-1000’s roadworthiness.
Prospects dim
Now, with a large debt from hedge fund financing, no near-term revenue and potentially costly reengineering ahead, Workhorse’s prospects look dim, according to Sam Abuelsamid, principal analyst for Guidehouse Research.
“It’s not clear who is going to trust Workhorse to deliver vehicles to them in the foreseeable future.”
Sam Abuelsamid, principal analyst, Guidehouse Research
“It’s not clear who is going to trust Workhorse to deliver vehicles to them in the foreseeable future,” Abuelsamid told FreightWaves.
Dauch also withdrew a complaint Workhorse (NASDAQ: WKHS) filed in June with the U.S. Court of Federal Claims over the awarding of a multibillion-dollar contract for next-generation mail trucks to Oshkosh Truck Co. Workhorse lost the bid for the trucks, which it had proposed to run on battery electricity.
Workhorse has cashed out 72% of its stake in Lordstown Motors, an electric pickup truck startup founded by former Workhorse CEO Steve Burns. Lordstown licensed technology from Workhorse in exchange for a 10% stake in the company. Workhorse realized $79 million from its sale of Lordstown Motors’ shares.
Ongoing business review
Dauch plans to reveal results of an ongoing business review in November during an analyst call following the release of Q3 earnings. He joined Workhorse on July 31 following the ouster of CEO Duane Hughes. Dauch previously led Delphi Technologies, which he oversaw into a $3.3 billion sale to BorgWarner Inc.
Given Dauch’s history and his experience at larger and more successful companies, Abuelsamid said a sale of the company or its parts is possible.
Intellectual property, such as technology it leased to Lordstown for the Endurance electric pickup truck “or maybe some patents that might have some value,” he said. “And then just clean up the mess and go home.”
Workhouse, for example, has a partnership with Moog Inc. to develop its Horsefly drone technology, which the company has demonstrated lifting off from a Workhorse truck, delivering a package and returning autonomously. Workhorse is seeking Federal Aviation Administration type approval for the drone.
Comings and goings
But given a raft of hires Dauch has made since joining Workhorse, righting the ship appears to be the first order of business.
Chief Financial Officer Steve Schrader and Chief Operating Officer Rob Willison, both of whom worked with Hughes, have left the company. The COO role is being eliminated.
Dauch named Greg Ackerson, Workhorse’s corporate controller, as interim CFO while a search for Schrader’s permanent successor is conducted. A press release said Schrader’s departure is not based on any disagreement with the company’s accounting principles or practices or financial statement disclosures.
Other appointments:
Jim Harrington, formerly Delphi Technologies’ senior vice president, general counsel, secretary and chief compliance officer, was named chief administrative officer, general counsel and secretary on Aug. 16.
Josh Anderson has been appointed chief technology officer, a newly created role responsible for managing and overseeing the development and implementation of Workhorse’s advanced technology into its products.
Jim Peters, formerly executive director of procurement and supplier quality worldwide operations-powertrain at American Axle & Manufacturing, has been named vice president of purchasing and supply chain. Dauch’s father founded AAM and Rich Dauch worked there for 13 years.
Dave Bjerke has been appointed vice president of product development, reporting to Ryan Gaul, president of commercial vehicles.
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