Lordstown Motors plans to lend mainly space to its massive former General Motors plant as the troubled start-up approaches the construction of the first production-grade Endurance trucks later this year. Interim CEO Angela Strand said on Wednesday that Lordstown is having “serious discussions … with several potential partners” who could build vehicles or do other work at the factory alongside the start-up – meaning the start-up could act as a kind of WeWork in manufacturing.
“This is a critical strategic turning point for us, a decision we believe will lead to significant new revenue opportunities for Lordstown at a time when Endurance production is growing,” Strand said.
“Our current footprint uses about 30 percent of the factory’s 6.2 million square feet, so we have plenty of room for potential partners to build vehicles, we can build vehicles for others and [Lordstown Motors] vehicle pallets, ”President Rich Schmidt added.
Strand and Schmidt shared the plan during the call with investors, where the company discussed the issue second quarter results. Lordstown Motors, which said in June that it The money will run out by May 2022 with no additional funding, lost $ 108 million during the quarter. The company was recently share purchase agreement with a hedge fund which allows it to raise up to $ 400 million. But the startup still wants to raise more funding as it plans for the announced September start date for Endurance production, and it won’t get money for these vehicles until they start delivering in early 2022 (roughly the same time Ford is competing F-150 Lightning has been sent).
These financing activities include a plan to allow other companies to operate the plant, find strategic partners and investors, and obtain debt financing. Strand — who made a five-month $ 500,000 deal with Lordstown as captain of the ship in search of a permanent CEO — said the startup was negotiating with several companies and potential lenders, but declined to name anything. He also said Lordstown Motors is seeking a third-party assessment of the value of the plant, the equipment it contains and the improvements made by the start-up – which could help increase the money Lordstown can borrow against the plant.
The former GM plant has played a superior role in Lordstown Motors ’short but turbulent story. In fact, the company was founded the intention is to purchase the plant in early 2019.
At the time, GM had come under tremendous pressure from then-President Donald Trump to close the plant (where it once produced Chevy Cruzen). So Lordstown Motors founder Steve Burns entered into an agreement with its former company, another electric start-up company called Workhorse, which aims to license intellectual property rights to an electric pick-up truck that was never put into service. GM assisted with the purchase and handed over some equipment. Trump said the deal was “GOOD NEWS TO SKY!”
Lordstown Motors, unveiled in a merger with a specialty company late last year, has since put some $ 240 million in work on the plant to get it ready to build an electric pick-up truck called the Endurance. Workhorse even considered using Lordstown Motors manufacturer if it won a contract to build a new generation of US postal service cars (before the contract was awarded) went to defense contractor Oshkosh).
But Lordstown Motors stumbled earlier this year after that Hindenburg Research published the report arguing that Burns had misled investors about how many pre-orders the startup had accumulated in the truck.
Burns has since resigned along with several other executives and his close employees, and the Securities and Exchange Commission and the Department of Justice are investigating the launch. Later, Lordstown Motors narrowed down its plans for primary production stopped work on another car – an electric car – it had to be part of a partnership with Camping World. This Week’s Workhorse sold 72 percent of its stake At Lordstown Motors.