Lordstown Motors Ready to ‘Hit the Ground Running’
YOUNGSTOWN, Ohio – Lordstown Motors Corp. has “an impressive game plan in the works” and its projected late 2020 production start is “absolutely” possible, a Youngstown/Warren Regional Chamber official said
The electric vehicle startup that announced Thursday it would take over the General Motors Lordstown Complex and launch production of electric vehicles there. Announced plans include launching production there by the end of next year.
“They’ve done a lot of work behind the scenes and they’re definitely ready to hit the ground running,” said Sarah Boyarko, the chamber’s chief operating officer.
Lordstown Motors expects “production to ramp up as early as the second half of 2020,” its website states. “In the meantime, we will be preparing the manufacturing plant for production while also working with the people of Lordstown to build a long-term plan for sustainability.”
The founder and CEO of the newly formed company, Steve Burns, is the former CEO of Workhorse Group Inc., which on Thursday entered into an intellectual property licensing agreement with Lordstown Motors,
Under the terms of the agreement, Workhorse is granting LMC a three-year exclusive license of certain intellectual property relating to the company’s W-15 electric pickup truck in exchange for an initial equity stake of 10% in LMC, which will be anti-dilutive for two years.
Said the CEO of Workhorse, Duane Hughes, in announcing the agreement, “This long-term partnership allows Workhorse to benefit by both monetizing our existing technology and participating in the upside potential of this new venture without prohibitively diluting our existing shareholders.”
On Friday Workhorse reported a net loss of $11.5 million, compared with a net loss of $5.5 million in the third quarter of 2018. The greater net loss was due to higher interest expense and its transition to a new generation of electric vehicles, which accounts for the absence of significant revenue, the company said.
Chamber representatives met with Lordstown Motors executives for a few hours Wednesday afternoon, the day before news broke that the electric vehicle startup would acquire the idled GM Lordstown plant.
During the meeting, which focused on the company’s strategy as well as how the chamber can help meet its immediate needs, executives said there would be “an outcome in a positive direction in the immediate future,” Boyarko said.
“They didn’t give us a specific timeline on Wednesday but obviously they knew something was happening pretty quickly,” she continued.
Financing is being secured through Brown Gibbons Lang & Company, an independent investment bank and financial advisory firm, according to the site.
Although what Lordstown Motors paid to buy the GM plant and its machinery has not been officially disclosed, U.S. Sen. Rob Portman said Friday, during a visit to the Youngstown Air Reserve Station, that the price was $20 million, according to today’s Tribune edition of The Vindicator.
In a statement issued Friday, U.S. Sen. Sherrod Brown urged Lordstown Motors to work with the United Auto Workers and its members to ensure is success as it plans to take over the General Motors Lordstown Complex and launch production of electric vehicles there.
“GM workers in Lordstown drove the success of the company for decades. I’m disappointed GM unilaterally decided not to bring a new product to Lordstown. That’s their loss and the Mahoning Valley deserved better,” said Brown, D-Ohio.
“Looking ahead, I want Lordstown Motors Corp. to succeed,” he continued. “The best way for the company to do that is to follow through on their commitment to work closely with the UAW and its workers, who are among the best in the world at what they do.”
In September, Lordstown Motors CEO Steve Burns said he intended to use union labor at the plant, but UAW Local 1112 President Tim O’Hara said Thursday no discussions have taken place.
The company is working with the Regional Chamber to identify community resources, Boyarko said.
“Our research department is putting together some follow-up for them and we are working with them on a whole host of resources in the community,” she said. “There’s definitely a strong effort on their end to utilize as many local resources as they can.”
Having the waiting game end regarding the fate of the idled plant was “the best thing for the Valley,” said Anthony Cafaro Jr., co-president of the Cafaro Co. “It’s positive that there’s another organization that’s willing to take those assets and hopefully put them to work and create opportunities for employment.”
Pictured at top: Rendering of a truck Lordstown Motors says it will manufacture at the former GM plant in Lordstown.
Copyright 2020 The Business Journal, Youngstown, Ohio.
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