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    Lordstown Motors sells former Ohio GM factory to Foxconn

    Electric truck maker

    Lordstown Motors Ltd

    get on 8.42%

    The plan is to sell the Ohio car factory to contract assembler Foxconn Technology Group on Thursday, which is a major cornerstone for underfunded startups as they work to bring their first pickup to market.

    Daniel Ninibagi, CEO of Rosetown Motors, said the two companies have entered into a non-binding agreement that Rosetown will sell its facilities and assets at a purchase price of $ 230 million, excluding certain assets. He said he did.

    In addition, Foxconn plans to invest $ 50 million in Ohio-based startups through the purchase of common stock. Lordstown Motors will use a Taipei-based electronics assembler to manufacture its vehicles, including its debut pickup truck, at its plant, Endurance said.

    “It will open up opportunities to accelerate the speed of new cars and reduce costs,” he said. The formal purchase agreement is expected to be reached by October 31, and the deal could close in April next year, Ninivaggi added.

    The purchase contract is from Lordstown Motors Trying to raise moneyAfter warning earlier this year It was burning in cash Earlier than expected, there was a shortage of funds to expand commercial production.

    The acquisition is also a milestone for Foxconn, which seeks to expand into the automotive industry, assembling vehicles on a contract basis, similar to how the iPhone is manufactured.

    Apple Ltd

    Earlier this year, Foxconn signed a contract with another electric car startup.

    Fisker Ltd,

    Joint production of more than 250,000 vehicles 1 year. The exact location was not specified at the time, but the collaboration was for Fisker’s second model.

    Foxconn will also manufacture Fiscar models at its Ohio plant, Ninivaggi said.

    General Motors Ltd

    Foxconn will provide employment to specific operational and manufacturing employees agreed, Rosetown Motors said.

    Lordstown Motors will use Foxconn to build vehicles at its Ohio car plant.


    Photo:

    The Wall Street Journal Nate Small Wood

    Lordstown Motors and Foxconn have also agreed to cooperate in the design and engineering of future models of Ohio startups. This includes the second and third models that appear on unspecified dates.

    Foxconn (formally known as Hon Hai Precision Industry Co.) aims to diversify beyond its core electronics business and has made multiple attempts to expand manufacturing in the United States. I have come.Wisconsin, but since then Reduce that ambition For small facilities.

    Lordstown Motors took over the Ohio plant from GM two years ago. Faced with pressure From the president at that time

    Donald Trump

    And other politicians to find a new home for an assembly plant of about 6 million square feet.

    Lordstown Motors Acquired a facility that was closed at the time For $ 20 million. We are working on remodeling a zero-emission pickup truck with the goal of starting limited production of the first all-electric endurance by the end of September.

    Ninivaggi said the company will build prototype trucks from the end of 2021 to early next year and plans to deliver them to consumers in 2022. The company said it will provide up-to-date information on truck timing in its third-quarter earnings. Phone scheduled for mid-November.

    “The facility is huge,” he said. “We have a limited amount of space to fill ourselves.” By partnering with Foxconn, Lordstown Motors has the opportunity to grow its business much faster than it can do alone.

    Lordstown Motors said Thursday that it had hired Jeffreys LLC to advise on its funding options. EV makers said they had a cash balance of $ 210 million to $ 240 million as of September 30.

    Lordstown Motors was one of several new electric vehicle startups launched over the past year through a reverse merger agreement with a special purpose acquisition company (SPAC).Its debut has boosted Wall Street’s enthusiasm for green technology in the automotive industry, attracting many investors.

    Tesla Of a corporation

    Stock price surge.

    Startup stock prices initially surged after listing, but have fallen in recent months as the company faces a number of challenges.

    In March, Newyork-based short-selling Hindenburg Research released a report claiming the company, questioning whether production could begin by September. Exaggerated the strength of the pre-order For trucks.

    The company’s board of directors committee, which was set up to consider short-selling claims, found some errors in the statement it made about the pre-order book. The Commission rejected other aspects of the report, including the allegation that the September release date of the Endurance issue was unrealistic.

    June, Founder and Chief Executive Officer Steve Burns resigns, Immediately after the company revealed the Securities and Exchange Commission I was investigating the business..

    Lordstown Motors says it is cooperating with the investigation. Investigation by the Ministry of Justice..

    In August, Hired Mr. Ninibagi, Former lieutenant of activist investor Carl Icahn as CEO. Ninibagi, who previously helped run Icahn’s automotive business, emphasized the importance of bringing trucks to market and the need for additional funding.

    It is very important to build a truck that can be sold, as Lordstown Motors has not yet made a profit from its manufacturing operations.This summer, the company Going Concern Notice Was Included Financial filing indicates that there was a question as to whether the business could continue next year.

    Its emission-free endurance truck, which is expected to start at $ 52,500, is aimed at commercial vehicle operators who can reduce the expected fuel and maintenance costs for battery-powered vehicles.

    Competition among electric vehicle start-ups is intensifying, and rivals

    Lucido Group Ltd

    Rivian Automotive recently began production of its first model.

    Ford motor Ltd

    Earlier this year, he said he was planning to release a battery-powered version. Its best-selling F-150 pickup Next year, at a lower starting price than Endurance.

    Write to Christina Rogers christina.rogers@wsj.com And Ben Foldy Ben.Foldy@wsj.com

    Copyright © 2021 DowJones & Company, Inc. all rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

    Lordstown Motors sells former Ohio GM factory to Foxconn

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    The post Lordstown Motors sells former Ohio GM factory to Foxconn appeared first on Eminetra.

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