In Wake of Chapter 11 Filing, Officials Envision Future Beyond Lordstown Motors
YOUNGSTOWN, Ohio, – Lordstown Motors Corp.’s Chapter 11 bankruptcy filing came as little surprise to local officials who say they remain otherwise optimistic about the future of the electric vehicle industry in the Mahoning Valley.
Lordstown Motors, the EV pickup truck startup that took over the former General Motors Lordstown plant in 2019, announced the bankruptcy filing and plans to sue strategic partner Hon Hai Technology Group and its affiliate Foxconn around 1 a.m. Tuesday.
When the startup sought approval of a job creation tax credit from the Ohio Tax Credit Authority in December 2020, it anticipated creating nearly 1,600 jobs at the plant by December 2025.
“They’ve had a lot of things to overcome,” Lordstown Village Mayor Arno Hill, who was in Columbus for a state board of elections conference Tuesday morning, acknowledged during a phone interview. The company has endured “a lot of growing pains,” including recalls and supplier problems.
“It certainly is not a surprise,” Rick Stockburger, president and CEO of Brite Energy Innovators in Warren, affirmed. “It is a really hard business to break into.”
Brite had ceased working directly with the company, but Stockburger said the writing had been on the wall for some time, given the downgrade in the stock and the stock split, he said. Its value proposition was to be the first in the electric vehicle space for fleet trucks, but the company wasn’t able to get to market first, which led to its downfall.
“That will happen when you are trying to do something that nobody’s ever done before,” Stockburger said.
“It’s unfortunate that the situation has escalated to this level. Hopefully, the bankruptcy proceedings and lawsuit will get resolved quickly,” said Guy Coviello, president and CEO of the Youngstown/Warren Regional Chamber.
“We remain unwavering in our support of Foxconn,” he added. “We welcome Foxconn’s ongoing investment in our community and look forward to working with them for many years to come.”
Hill estimated that Lordstown Motors occupies about a third of the former GM complex, which Foxconn acquired from Lordstown Motors as part of a 2021 agreement. Last fall, Foxconn and California EV manufacturer Indiev Inc. entered into an agreement to build prototypes of Indiev’s Indi One at the Lordstown plant, and this spring Foxconn produced the first batch of Monarch MK-V electric smart tractors under an agreement with Monarch Tractor.
“Lordstown is one of the pieces to the Foxconn puzzle,” Hill said.
U.S. Sen. Sherrod Brown, D-Ohio, and U.S. Rep. Bill Johnson of Marietta, R-6th, weighed in on the Lordstown Motors news.
“The Mahoning Valley deserves better than a trail of broken promises,” Brown said. “Autoworkers in the Valley are the best in the world and have so much potential in the EV industry – they just need companies to get their act together.”
Johnson, who was at Second Harvest Food Bank of the Mahoning Valley for a media event Tuesday morning, also shared his disappointment about the announcement.
“Everybody had such high hopes when Lordstown and Foxconn built their partnership,” he said.
“Here’s what I can tell you – I don’t know who’s going to do it or when they’re going to do it, but the people in this region know how to manufacture automobiles,” he continued. “Whether it’s electric vehicles or combustion engine vehicles, we know how to make cars. We know how to make trucks. And so I feel confident, at some point, somebody is going to see the value of continuing that kind of operation here in the Valley. I’m going to do everything I can to be supportive of that.”
The Mahoning Valley is better off for having Lordstown Motors attempt to do something “truly innovative here,” Stockburger said. The company “got us to where we are” with the plant complex, and Foxconn already has absorbed many of the workers who had been at Lordstown Motors, he said.
“Companies come and go, but the culture that you create, having an innovative environment, is something that can last for a very long time, through a lot of turmoil,” he said. “I’m very excited about the future of Foxconn.”
Copyright 2023 The Business Journal, Youngstown, Ohio.