Workhorse Shares Rise as Postal Service Meeting Is Scheduled

(Bloomberg) -- Workhorse Group Inc., reeling from the loss of a U.S. Postal Service contract, will meet with agency officials Wednesday as the electric-vehicle maker weighs options to challenge the decision.

Speaking on an earnings call Monday, Workhorse Chief Executive Officer Duane Hughes said the decision to award the $6 billion contract to Wisconsin-based competitor Oshkosh Corp. was “not the result we anticipated.” He said Workhorse will “explore all avenues available to us.”

Workhorse shares fell 2.7% in pre-market trading but closed up more than 7.2% in New York Monday after the meeting and earnings were announced. The company reported net income for the fourth quarter of $280.5 million, compared with $655,000 in the year-ago period.

“We understand that many people want answers and information in a timely manner and we will continue to work with the Postal Service according to the terms of engagement as we move forward,” Hughes said.

Shares of the the Loveland, Ohio, company lost 51% of its value last week after the Postal Service announced its decision to award a 10-year contract to manufacture a new fleet of as many as 165,000 postal delivery vehicles. Only 10% of those are planned to be electric, Postmaster General Louis DeJoy told a congressional committee last week.

Earlier: Workhorse Records Worst-Ever Weekly Rout After Postal Defeat

Wall Street analysts and others have said the decision was shocking, especially given President Joe Biden’s executive order mandating that the government’s massive fleet of vehicles go green to help fight climate change.

“We are talking to different entities and groups out there and let’s say we are going to get information inflow, right, so we know what available options that we have,” Hughes said. The goal is for the company to “approach not just the post office, but whomever else we have to approach to better understand how we go about having a constructive conversation that leads to something more positive down the road.”

Allies on Capitol Hill have called for the contract to Oshkosh to be scrapped, and three Ohio Democratic lawmakers sent a letter to Biden Monday asking him to halt the contract arguing a review is needed unto whether “inappropriate political influence was involved in the decision.”

The letter from Democratic Representatives Tim Ryan and Marcy Kaptur and Senator Sherrod Brown also argues a review is needed into whether “inappropriate political influence was involved in the decision.”

“This contract will have consequences for decades to come and, as such, we have serious concerns it could be a wasted opportunity to address the climate crisis and the re-industrialization of our manufacturing sector,” the lawmakers wrote.

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