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New USPS funding bill may give Workhorse an opportunity for $6B contract

The bill would earmark $6 billion for the U.S. Postal Service to modernize its fleet, and require electric or zero-emission vehicles make up at least 75 percent of the new fleet, according to Reuters.
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WASHINGTON — A U.S. House bill introduced Monday offers the U.S. Postal Service $6 billion to replace its aging fleet with mostly electric or zero-emission vehicles, seemingly contrasting a previous deal struck last month for mostly combustion-powered vehicles.

Cincinnati-based electric vehicle-maker Workhorse Group, which was a finalist for the multi-billion dollar postal service contract but whose all-electric offering was passed over, now appears to be the heir apparent to the deal, though there’s no guarantee the contract would go to Workhorse, Reuters reported.

If Workhorse was awarded the contract, Lordstown Motors Corp. executives have said they’d expect the vehicles to be built at their 6.2-million square-foot facility in Lordstown, the former General Motors Lordstown Assembly Complex.

The postal service modernization bill, introduced Monday by U.S. Rep. Jared Huffman of California, D-2nd., would earmark $6 billion for the U.S. Postal Service to modernize its fleet, and require electric or zero-emission vehicles make up at least 75 percent of the new fleet, according to Reuters.

The bill would also require at least half of the postal service’s new purchases of medium or heavy duty vehicles in the next eight years to be electric, and require all new postal service vehicles to be zero-emission after January 2040.

The new bill marks the third time Huffman has introduced such legislation over seven years and three Congress. The most recent bill, introduced last year, didn’t make it to a vote.

The initial $482 million, 10-year contract for the postal service’s Next Generation Delivery Vehicles, awarded last month to Wisconsin-based defense manufacturer OshKosh Corp., included a 165,000-vehicle order — but only 10 percent of those vehicles would be electric, Postmaster General Louis DeJoy told a U.S. House committee last month.

DeJoy at the time said the postal service would need “3 or 4 extra billion” dollars to buy mostly electric vehicles.

U.S. Rep. Tim Ryan of Howland, D-13th, who is an original cosponsor of Huffman’s new bill, and other federal lawmakers last week called for a second look at the contract award, saying it conflicts with President Joe Biden’s executive order on climate change, which would convert the 650,000-vehicle federal fleet to battery power.

"I am proud to introduce this legislation that will help bring the United States Postal Service into the 21st century," Ryan said in a statement Monday to Mahoning Matters.

"There is no question that electric is the future of the automotive industry. Currently over 141,000 of the aging postal trucks average only 10 miles per gallon. These trucks are at the end of their operational lifespan and we need to buy new ones — so why wouldn't we want to go electric? This legislation helps us do just that."

Workhorse met last week with postal service officials for more information on its rejected bid, and may be preparing a formal challenge.

In a message to investors, Workhorse CEO Duane Hughes said the meeting “marked the first step in what we expect may be a prolonged process to explore our options and possibly pursue further action related to our NGDV bid.

“We will continue to follow the proper due course procedures as defined by the USPS and will also look to other options available to us.”

Shares of Workhorse (NASDAQ: WKHS) rose nearly 13 percent to close at $15.50 Monday, though they plummeted 47 percent following the contract award announcement.

Shares of Lordstown Motors Corp. (NASDAQ: RIDE) lost 3 percent on the day to close at $16.26.

OshKosh stock suspicions

Ryan on Monday called for the Securities Exchange Commission to investigate a $54 million purchase of more than half-a-million shares of OshKosh stock (NASDAQ: OSK) on Feb. 22, the day before its postal service contract award was announced.

Ryan, in a Monday letter to Acting SEC Chair Allison Herren Lee, wrote:

As you may know, the United States Postal Service (USPS) recently awarded a contract for their Next Generation Delivery Vehicle program to replace the aging USPS fleet. This contract was awarded to Oshkosh Corporation and is worth up to $6 billion. I write to pass along reports of what might be unusual trading of Oshkosh stock that took place less than 24 hours before Postmaster General Louis DeJoy publicly announced the contract decision in front of a House panel on February 23rd.

Specifically, an over $54 million purchase of OSK, made 20 hours before Mr. DeJoy’s announcement, was brought to my attention on social media and in news reports. Additionally, it is my understanding that the OSK stock rose significantly prior to the announcement. Given the gravity and serious implications of this contract, I am writing to request that the Securities and Exchange Commission look into this issue as soon as possible.

I thank you for your work and I stand ready to assist in any way that I can.

Justin Dennis

About the Author: Justin Dennis

Justin Dennis has been on the beat since 2011, covering crime, courts and public education. Dennis grew up in Poland and Salem and studied journalism and communications at Cleveland State University and University of Pittsburgh.
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