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Lordstown Motors is essentially looking to lend space in the massive former General Motors factory it owns, as the struggling startup moves closer to building its first production-grade Endurance pickup trucks later this year. Acting CEO Angela Strand said on Wednesday that Lordstown was in “serious discussions … with several potential partners” who could build vehicles or do other types of work in the plant alongside the startup – which means that the startup could act as a sort of WeWork for manufacturing.
“This is a critical strategic backbone for us, a move that we believe will lead to significant new income opportunities for Lordstown as Endurance production ramps up,” said Strand.
“Our current footprint uses about 30 percent of the plant’s 6.2 million square feet, so we have plenty of room for potential partners to build vehicles, for us to build vehicles for others and for others. ‘others [Lordstown Motors] vehicle platforms ”to be built, added President Rich Schmidt.
Strand and Schmidt shared the plan in an investor call in which the company discussed its second quarter financial results. Lordstown Motors, which said in June it would be cash-strapped by May 2022 without additional funding, lost $ 108 million in the quarter. The company was recently backed by a share purchase deal with a hedge fund that could allow it to raise up to $ 400 million. But the startup is still looking to raise more funds as it heads to an announced September start date for Endurance production, and it won’t make any money on these vehicles until they do. start shipping in early 2022 (which is around the same time that Ford’s competing F-150 Lightning is expected to ship).
These fundraising efforts include the plan to allow other companies to use the plant, as well as finding strategic partners and investors and debt financing. Strand – who struck a five-month, $ 500,000 deal with Lordstown to order the ship while he searches for a permanent CEO – said the startup was in talks with a number of companies and potential lenders , but declined to name any. She also said Lordstown Motors was working to get a third-party appraisal of the value of the plant, the equipment inside and the upgrades the startup has made, which could help increase the amount. money Lordstown can borrow against the factory.
The old GM plant has played a disproportionate role in the short but tumultuous history of Lordstown Motors. In fact, the company was basically founded with the intention of purchasing the plant in early 2019.
At the time, GM had come under enormous pressure from then-President Donald Trump to shut down the plant (where it once produced the Chevy Cruze). Lordstown Motors founder Steve Burns therefore struck a deal with his former company, another electric vehicle startup called Workhorse, to license an intellectual property license for an electric pickup truck that never went into production. GM helped with the purchase and handed over some equipment. Trump said the deal was “BIG NEWS FOR OHIO!”
Lordstown Motors, which went public in a merger with a specialist acquisition company late last year, has since invested around $ 240 million in the plant to prepare it to build the electric pickup truck. , called Endurance. Workhorse was even considering using Lordstown Motors as a manufacturer if he won the contract to build the next-generation mail truck for the US Postal Service (before the award went to defense contractor Oshkosh) .
But Lordstown Motors stumbled earlier this year after Hindenburg Research released a report alleging Burns misled investors about the number of pre-orders the startup collected for the truck.
Burns has since resigned, along with a number of other executives and employees close to him, and the startup is under investigation by the Securities and Exchange Commission and the Department of Justice. Lordstown Motors subsequently cut back on its initial production plans and halted work on a second vehicle – an electric van – which was supposed to be part of a partnership with Camping World. This week, Workhorse sold 72 percent of the acquired stake in Lordstown Motors.
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