Lordstown reaches deal to sell Ohio plant to Taiwan’s Foxconn
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Lordstown Motors Corp., the cash-strapped electric truck maker, is set to strike a deal to sell its highly politicized Ohio plant to Taiwanese group Foxconn Technology, people familiar with the matter have said.
The companies are expected to announce the pact as early as this week, said the people, who asked not to be named because the plan is not yet public. They did not disclose the value of the transaction. Lordstown Motors struck a deal with General Motors Co. in late 2019 to purchase the plant the automaker opened in 1966.
The sale will provide much-needed funds and potentially help Lordstown Motors realize the benefits of large-scale manufacturing faster by building multiple models at the same plant with Foxconn. For Apple Inc.’s largest iPhone assembler, the plant would establish the company’s automotive manufacturing footprint in the United States as it embarks on electric vehicles.
A Lordstown Motors spokesperson declined to comment. Representatives for Foxconn did not immediately respond to requests for comment. Lordstown Motors shares rose 8.4% to $ 7.98 before regular trading began on September 30. The company has lost almost three-quarters of its market value in the past year.
Lordstown Motors has been the subject of investigations by the United States Securities and Exchange Commission and the Department of Justice after an internal investigation concluded that the previous management had made inaccurate statements about Endurance’s pre-orders . The company is pushing to start deliveries of the pickup next year.
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Even though Endurance is well received by customers, Lordstown Motors will not be making full use of its Ohio plant anytime soon. Selling the facility and running alongside Foxconn could help the company better leverage the facility where GM employed 10,000 people at its peak.
GM’s 2018 decision to shut down the plant was a blow to then-President Donald Trump, who a year earlier had discouraged rally enthusiasts from selling their homes because of all the jobs. that he had promised to bring back. Democrats have taken development as a symbol of the broken promises Trump made to voters in a key battlefield state.
Lordstown Motors had to regain a foothold after ousting Steve Burns, its founder and CEO, in June over false claims he made about Endurance controls. The company has repeatedly warned that its status as a going concern was in doubt less than a year after it merged with a special purpose acquisition company, or SPAC, to go public.
Burns’ successor CEO Dan Ninivaggi said in an interview last month that he was looking for partners to help the company take full advantage of a factory that was once the largest industrial employer in the Mahoning Valley. .
Lordstown Motors stock rises after possible sale announcement https://t.co/JKDPlvfDHv
– 21WFMJNews (@ 21WFMJNews) September 30, 2021
âThe key to unlocking financial potential is to maximize the value of the Lordstown facility,â Ninivaggi said at the time. âWe are exploring a number of alternatives. It can take many different forms. This is the first job for me.
Foxconn hopes to replicate the success of its smartphone by building its customers’ electric vehicles from the chassis. The electric vehicle industry is booming at a time when big tech companies from Apple to Xiaomi Corp. invest heavily in new generation mobility technologies.
Over the past year, Foxconn has launched an open EV platform, signed a manufacturing agreement with Fisker Inc., and formed a partnership with Thai state conglomerate PTT Pcl.
Earlier this year, Chairman Young Liu of Foxconn’s flagship unit, Hon Hai Precision Industry Co., said the company plans to establish an electric vehicle manufacturing plant in Wisconsin as the first automotive outpost. American. With Foxconn boosting its automotive power, it is seen as a contender in the electric vehicle manufacturing race for Apple.
Foxconn has had a controversial history of bringing its manufacturing capabilities to the United States. This vision was never realized, and Liu said earlier this year that he was trying to figure out what to do on the spot.
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