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  • OTVI.USA
    15,403.810
    105.620
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  • TLT.USA
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  • TSTOPVRPM.ATLPHL
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Electric TrucksModern ShipperNewsTop StoriesTrucking

Workhorse lawyers up in mail truck contract dispute with Postal Service

Electric delivery van maker expects ‘prolonged process’ to contest decision

Workhorse Group (NASDAQ: WKHS) expects a “prolonged process” to alter the U.S. Postal Service’s decision to award next-generation mail truck business to defense contractor Oshkosh Truck Corp. (NYSE: OSK).

The Loveland, Ohio-based Workhorse was stunned last week when the Postal Service awarded a 10-year contract initially worth $482 million to the Wisconsin company. Oshkosh makes military vehicles, fire trucks and ambulances.

The Next Generation Delivery Vehicle (NGDV) business came down to three finalists. Workhorse offered the only battery-electric powered vehicle (EV). That was consistent with President Joe Biden’s executive order to make all 645,000 federal fleet vehicles zero-emissions EVs.

Investors had bid up Workhorse shares to record levels. They expected it would get at least a piece of the multibillion-dollar contract. When that didn’t happen, Workhorse shares lost 50% of their value in two days. Analysts, in turn, cut their target prices.

“While we were not modeling success in the USPS [competition], we had anticipated Workhorse would play a role in the contract, especially given the administration’s stance around government fleets being zero emission,” Cowen analyst Jeffrey Osborne wrote on Monday after Workhorse’s Q4 earnings call.

Hiring lawyers and consultants

After a meeting with the Postal Service on Wednesday, Workhorse said it will “follow the proper due course procedures as defined by the USPS and will also look to other options available to us,” Workhorse CEO Duane Hughes said in a press release Thursday.

“In the interim, we have retained the services of leading legal and corporate advisory firms, including Akin Gump Straus Hauer & Feld LLP and Mound Cotton Wollan & Greengrass LLP, to identify our options and pursue them effectively,” he said.

Workhorse shares traded at $13.76, down 7.77% at 10:28 a.m. Thursday. The meme stock frenzy briefly pushed Workhorse shares above $42 a few weeks ago.

“With the loss of the extremely lucrative USPS NGDV contract, Workhorse lost its single-biggest chance to gain scale in the EV market,” short seller Phillip Martinelli wrote Monday on the investor site Seeking Alpha.  

Workhorse may fight mail truck order awarded to Oshkosh

Oshkosh beats Workhorse for Postal Service delivery contract

Workhorse share collapse raises pressure on debt repayment

Click for more FreightWaves articles by Alan Adler.

Alan Adler

Alan Adler is a Detroit-based award-winning journalist who worked for The Associated Press, the Detroit Free Press and most recently as Detroit Bureau Chief for Trucks.com. He also spent two decades in domestic and international media relations and executive communications with General Motors.

4 Comments

  1. I am sure this is not over, specially now that we have a law firm involved in this matter. Thank you

    Sincerely,

    Siamak

  2. Every single postal Carrier in the Northwest wants the workhorse trucks as their work vehicles, every Carrier I’ve spoken to has been very clear as my husband is a Carrier nobody wants to get the Oshkosh truck’s! No one!

  3. Even my early 1900’s era grandparents could have given “Workhorse” some sound advice, which is, don’t count your chickens until they are hatched.

  4. Every carrier that is hospitalized, or family of one who dies from heat stroke, and every LLV that burns, or carrier injured by a burning LLV should countersue