A St. Joseph County factory that churned out consumer-grade sport utility vehicle Hummers until 2009 appears ready to be fired back-up, but with a different, and greener, vehicle.
Michigan-based Electric Last Mile Solutions Inc. says it intends to manufacture battery-powered delivery vans inside the 650,000-square-foot auto plant in Mishawaka, which is adjacent to the AM General plant producing military Humvees.
The move is made possible by a merger between ELMS and Forum Merger III Corp. (Nasdaq: FIII), a Florida-based investment company, in a deal valued at $1.4 billion.
In an interview with Inside INdiana Business, St. Joseph County Office of Economic Development Executive Director Bill Schalliol said the county is hopeful this time. “This group has come in and they’re capitalized. They’ve got a great team around them. We’re really excited about the project.”
But Schalliol has a reason to have guarded optimism. He says the factory has had a “weird history.” For seven years, General Motors operated the plant, producing Hummer 1 and Hummer 2 vehicles. But it struggled with the economics of the 2008 recession.
From 2011-2013, another company manufactured wheelchair-accessible taxicabs. For a while, AM General was a contract manufacturer of Mercedes-Benz autos for the Chinese market. Neither of which continued for very long.
In 2017, AM General sold the plant to SF Motors, a subsidiary of China-based Sokon Industry Group, to build electric vehicles. Schalliol says SF invested $20 million to retool the plant, but no vehicles ever rolled off the assembly floor.
“A couple of years ago, we were working with a group out of China that was going to build electric cars. They got to a point where it almost started, but they never quite made it to the point where they ever produced anything” said Schalliol. “Again, just kind of a weird little storied history, as compared to its neighbor, the H-1 plant where they’ve been making vehicles since the late 70s.”
The ELMS management team is led by Chief Executive Officer and co-founder James Taylor, who is the former general manager of the Mishawaka plant when it produced Hummers
“The demand for cost-effective solutions to support the e-commerce ecosystem is overwhelming. This industry promises rewards to first movers who can deliver value-driven solutions,” said James Taylor, CEO of ELMS. “ELMS is solely focused on the commercial vehicle market. Our products are designed to provide the most cost-effective, reliable and customized solutions for the last mile delivery of goods and services.”
Taylor says the company has already received pre-orders for 30,000 delivery vans. Schalliol says the company expects another 30,000 to 60,000 orders by the middle of 2021.
If the automaker’s plan moves forward, ELMS says it plans to eventually invest approximately $380 million, including $80 million during the first two years, to get the factory fully operational.
Schalliol with SF’s previous investment, ELMS can utilize some of the equipment already in place, and hopefully, start operating by the end of the summer.
“When the SF Motors Group bought it, they basically took everything out of the building and put all new equipment in, but never got to a point where they ever made anything. So, this is going to be an ability to use what they put in and then put in additional equipment to start building stuff.”
According to St. Joseph County, ELMS will initially launch with 140 workers, increasing staffing to 450 workers when it reaches full production on one line of smaller vans. Within four years, the company could have 960 employees if it produces a second assembly line, manufacturing larger sized delivery vans.
Schalliol says ELMS has worked out a deal with the United Autoworkers Union, which has represented workers at this plant in recent years.
“They have put in place a callback provision. Those workers that have a callback right, or would want to be called back, have the opportunity. So, they’re getting workers that have worked on vehicles and have an understanding of that type of work,” explained Schalliol.
The companies hope to close in the first quarter of 2021, which ELMS would then become a publicly listed company and trade on Nasdaq under the new ticker ELMS.
St. Joseph County Office of Economic Development Executive Director Bill Schalliol said the county is hopeful the plant will have long-term success.