Rumor Has it, it Will be Renamed Taiwan Town
“Don’t move. Don’t sell your house” – Trump at a 2017
After GM nearly gifted it’s Lordstown plant to Lordstown Motor Corporation (LMC) in 2019 for $20 million, the plant has been re-sold for $230 million.
Electric-truck start-up Lordstown Motors just confirmed a meaningful deal that should fetch it some much-needed cash. You’d think the development should have sent the electric-vehicle stock soaring. Instead, Lordstown shares were stumbling Friday morning and were down 15%.
Lordstown shares surged on Sept. 30 after Bloomberg reported the company is nearing a deal with Hon-Hai Precision, better-known as Foxconn, to sell its assembly plant in Ohio. Lordstown confirmed the rumor later in the evening, but there’s a lot more to it than just an asset sale.
In a press release, Lordstown announced it has partnered with Foxconn to “work jointly” on its electric-vehicle programs at the 640-acre facility in Ohio. Once a definitive agreement is reached, Foxconn will purchase parts of the facility for $230 million.
After an initial dead cat bounce that saw the stock jump from $7.98 on Thursday, then opening at $8.79 Friday morning, it closed at $6.53, as reality started to set in. As recently as February of this year, the stock was trading at over $30.
CEO Henrik Fisker of Fisker Motors, says if all goes as planned, the Lordstown Motors Plant will start producing Fisker’s new PEAR electric vehicle by 2024. 150,000 units a year to start but eventually the goal is to make 250,000 a year. The dates may move up with the Lordstown deal.
Meanwhile LMC may be looking to push back the delivery date of the electric Endurance pickup to late 2022.
Lordstown Motors problems are many, including a fake list of over 100,000 vehicle pre-sales. The prototype pickup burned to the ground in it’s first few minutes of operation. The pickup entered in a Baja race completed less than 40 miles of the 280-mile race. U.S. Justice Department and SEC are investigating insider trading and allegations that the company misled investors. There are more, but the main problem was LMC needed money.
✱The GM plant once employed over 13,000. It now employs around 500.
✱LMC uses only 20% of the plant’s 6.2 million square feet.
✱Foxconn is an Apple supplier and manufacturing partner.
The “Lordstown” or perhaps now the Taiwan Town plant is located about 20 miles from Youngstow, NW route.
This is the latest in a series of discussions on the Lordstown plant, the last one is here.