Lordstown Motors, an Electric Truck Maker, Files for Bankruptcy
Lordstown Motors, the troubled electric pickup truck company that bought a shuttered General Motors factory in Ohio, filed for bankruptcy protection on Tuesday.
Once hailed by former President Donald J. Trump for preserving manufacturing jobs, the company struggled with a series of development setbacks and frequent management changes, and never managed to make or sell many trucks.
The Chapter 11 bankruptcy filing was prompted by a dispute with a major investor, Foxconn, the contract manufacturer that is based in Taiwan. Foxconn said Lordstown had breached their investment agreement because its stock had fallen below $1 a share. Lordstown said on Tuesday it had filed a lawsuit asserting that Foxconn failed to honor its agreement to invest more money into the company.
Lordstown was founded in 2018 by Steve Burns, the former chief executive of another electric vehicle company called Workhorse Group. The company purchased a former G.M. plant in Lordstown, Ohio, that had produced the Chevrolet Cruze sedan. Mr. Trump promoted the deal on Twitter even before an agreement was signed.
Lordstown had hoped to produce an innovative truck that used electric motors on each of its wheel hubs, but ran into difficulty turning its idea into a vehicle that it could mass produce. Even at its peak, the company employed a fraction of the employees that once produced cars for G.M. in Lordstown, which is between Cleveland and Pittsburgh.
In 2021, Lordstown Motors sold its factory to Foxconn, which is best known for assembling Apple’s iPhones at sprawling factory campuses in China.
Shares of Lordstown fell more than 50 percent in early trading on Tuesday, to about $1.20. They had traded at around $400, adjusting for a recent stock split, in early 2021 when investors were incredibly optimistic about the prospects of electric-vehicle start-ups. Lordstown listed its shares on the Nasdaq stock exchange in October 2020 by merging with a special purpose acquisition company called DiamondPeak Holdings.
This is a developing story. Check back for updates.
Neal E. Boudette is based in Michigan and has been covering the auto industry for two decades. He joined The New York Times in 2016 after more than 15 years at The Wall Street Journal. @nealboudette
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