Lordstown Motors Plans Battery, Engine Production in Former GM Plant
LORDSTOWN, Ohio — Lordstown Motors Corp. intends to build a battery-production line and an electric motor-manufacturing line inside the former General Motors Lordstown complex, its CEO said Monday, as the company moves forward with building an all-electric pickup at the sprawling manufacturing complex.
“We are building our own battery pack line inside the plant, and we’ll build electric motors inside the plant,” said Steve Burns. “We think it’s the prudent thing to do. It’s going to be a big thing.”
Burns comments came as The Business Journal was first to report that GM has agreed to lend Lordstown Motors $40 million – up to $50 million if necessary – so the startup electric-truck maker can purchase and begin rapidly retooling the 6 million square foot plant for production.
The open-end mortgage document was filed Dec. 5 in the Trumbull County Recorder’s office. A separate memorandum of options filed the same day enables GM to repurchase the plant, as well as lease adjacent parcels of land and some space inside the complex.
Both documents were signed Nov. 7, the day GM announced Lordstown Motors had purchased the plant. The price was $20 million, according to the quit-claim deed.
Burns declined to comment on the terms of the loan arrangement with GM.
“We can’t talk about any terms of the agreement,” he said. “The main thing was to get the plant and to start retooling and reconfigure it. That keeps us on track with November 2020 deliveries.”
The option for GM to lease the 500,000 square feet of space inside the plant and 400,000 square feet of land expires April 1, while the option to repurchase the assets expires May 30, indicating a tight timeframe for Lordstown Motors to retrofit the plant for production.
Moreover, the lease options carve out four parcels that could be combined with virgin land that GM either owns next to the plant or could buy in connection with its $2.3 billion joint venture with LG Chem to manufacture battery cells in or near the village of Lordstown.
Burns emphasized the Lordstown Motors project is separate from the joint venture announced last week between GM and South Korean battery cell producer LG Chem, which plan to build a $2.3 billion battery plant in or near Lordstown.
“We haven’t finalized the site plan for the battery plant. It’s not anything we’re ready to announce yet,” GM spokesman James Cain said Friday.
Lordstown Motors has already secured its battery cell supplier, its CEO said, but has not publicly identified its partner. However, Burns said that he would prefer the supplier locate in or near the plant.
“We know who it is,” Burns said, “but we want to announce it with them in due time.”
Lordstown Motors is currently working on prototypes of the company’s first vehicle, the Endurance. The initial test vehicles are being designed and built at Lordstown Motors’ engineering offices in Detroit, according to Burns.
“The first prototype should be finished right after Christmas,” he said.
In the meantime, the startup has hired “a plant HR manager, a big job,” Burns said. “We have a plant manager in there five days a week. The bulk of the work right now is with the 70 engineers building the prototype.”
News that GM is financing the plant purchase and initial retooling came as a surprise to elected officials, who see it as good news for Lordstown Motors.
“It gives them credibility that GM is willing to invest. It shows there is some trust and some level of confidence,” said state Sen. Sean O’Brien, D-32 Bazetta. “GM, by having this deal structured the way they did, is doing what it can to help Lordstown Motors succeed.”
U.S. Rep. Tim Ryan, D-13 Ohio, also sees the financial relationship as an affirmation of Lordstown Motors’ business plan.
“It solidifies their ability to go out and get more money because they’re going to have the backing of one of the Big Three,” Ryan said.
“The market is starting to see GM as being on the cutting edge of [electric vehicles],” he continued. “They see the battery investment that was just announced, and General Motors is signaling to the market that they’re committed to Lordstown Motors. It’s is a really important step for them moving forward.”
For members of the United Auto Workers, the financing agreement does not come as a surprise, says Tim O’Hara, UAW Local 1112 president.
As O’Hara told the Detroit Free Press Monday, “There is a lot of suspicion that once it’s all said and done that GM itself will end up building electric vehicles in Lordstown after all its loyal employees and Local 1112 members had to move throughout the nation.”
Copyright 2021 The Business Journal, Youngstown, Ohio.