End of Loan Fund Won’t Stop Lordstown Motors, Company Spokesman Says
YOUNGSTOWN, Ohio – Lordstown Motors Corp.’s plans to manufacture electric pickup trucks aren’t dependent on a federal loan program that President Donald Trump wants to eliminate, a company spokesman said Monday.
Trump’s fiscal 2021 budget proposes to eliminate the Advanced Technology Vehicles Manufacturing Loan Program in the Department of Energy, which helps companies retool facilities to build electric vehicles.
Lordstown Motors plans to begin production of its Endurance electric pickup truck at the former General Motors plant in Lordstown later this year, and is in discussions with the U.S. Department of Energy for a reported $200 million loan from the program.
Company officials have said launching production at the former GM plant would cost at least $300 million, and an investment banker is working on raising the necessary funding.
The company has not yet applied for the loan, spokesman Ryan Hallett. He also declined to comment further on “financial specifics” of the company.
“We are continuing conversations with government leaders as we explore our options, but we see it as one of our many options to consider,” Hallett said. “We will factor this new information into our decision-making process, but our business model stands on its own without it.”
U.S. Rep. Tim Ryan, D-13 Ohio, blasted the proposal to eliminate the program in a statement his office released Monday afternoon. Ryan pledged to use his position on the House Appropriations Committee to block the administration’s efforts to end the loan program.
Ryan met in his Capitol Hill office Jan. 29 with Lordstown Motors CEO Steve Burns. Ryan also took Burns as his guest to the annual State of the Union Address last week, an event that drew national attention when the frustrated congressman walked out of the speech before Trump was finished.
Ryan spokesman Michael Zetts rejected the notion that elimination of the loan program was a form of retaliation against Ryan for the slight.
“The president did this last year [eliminated the same program], and we had to fight in Appropriations to get the funding put back in,” he said.
The $17.7 billion loan fund, which was authorized by the Energy Independence and Security Act of 2007, to date has loaned $8 billion for projects to support the production of more than four million advanced technology vehicles, according to the U.S. Department of Energy website.
Nissan North America and Tesla Motors have tapped the loan program and paid back its loans. Ford Motor Co. also borrowed from the program.
U.S. Sen. Rob Portman, R-Ohio, said in an email he would continue to urge the Department of Energy at support a loan application from Lordstown Motors. He joined Ryan in a Jan. 22 letter to the department calling on the department to give its “fullest consideration” to such a loan.
“Lordstown Motors’ proposal to convert GM’s Lordstown Assembly Plant into a state-of-the-art electric vehicle manufacturing facility is a good example of why Congress created the Advanced Technology Vehicles Manufacturing loan program,” Portman said.
“It seems apt that Lordstown Motors has dubbed their first truck the Endurance as once again this region has to work a whole lot harder for what we earn than other places,” said Rick Stockburger, president and CEO of Brite Energy Innovators in Warren. “This announcement is disappointing but one thing I know is that we are committed to the Voltage Valley and anyone looking to slow that down is in for the fight of their life.”
Ohio Democratic Party Chairman David Pepper slammed the proposal to eliminate the program in a statement emailed by the party. The statement referenced Trump’s failure to respond to letters from then-United Auto Workers Local 1112 President Dave Green requesting help in the aftermath of GM’s decision to close the Lordstown plant, his comments that the closing didn’t matter because Ohio would replace those jobs “in two minutes” under his economic leadership, and his attacks on Green via Twitter.
“Today’s stunning news is just one more example of how little he actually cares about the workers he made so many false promises to,” Pepper said. “Donald Trump needs to get off Twitter, stop golfing every weekend and get to work helping Ohio workers, rather than screwing them over at every turn.”
U.S. Sen. Sherrod Brown, D-Ohio, who also signed the letter to the Energy Department, blasted the proposed cancellation of the loan program as “yet another betrayal” of Lordstown workers.
“Last week, during the State of the Union, the president boasted about a ‘blue collar boom,’ despite doing nothing to save the thousands of jobs lost in Lordstown, and after giving GM massive tax breaks to shut down American factories and ship jobs overseas. Now, he’s proposing to eliminate the loan program that Lordstown Motors is in discussions to use to build electric trucks,” Brown said. “We need a president who will better honor the dignity of work in this country.”
Feb. 10, 2020: Trump’s Fiscal Budget Ends Program Lordstown Motors Wanted to Tap for $200M
Copyright 2020 The Business Journal, Youngstown, Ohio.