David Welch and Debby Wu
Thu, September 30, 2021
(Bloomberg) -- Lordstown Motors Corp. agreed to partner with Foxconn Technology Group in a $280 million deal that has the startup selling its former General Motors Co. factory in Ohio to the Taiwanese company in exchange for cash while also receiving an equity investment.
Under terms of the transaction, Lordstown Motors will sell the Lordstown factory to Foxconn for about $230 million after buying it from GM for just $20 million two years ago. The maker of Apple Inc.’s iPhone will buy $50 million worth of common stock in its new partner and will assemble the Lordstown Endurance electric pickup truck. The deal is contingent on the two sides reaching an agreement on manufacturing the vehicle. Foxconn plans to start mass production in April, according to a person familiar with its schedule.
Lordstown shares jumped as much as 12% in late New York trading Thursday. During regular trading hours, the stock rose 8.4%, closing at $7.98 after Bloomberg had earlier reported a deal was in the works. It’s still down 60% for the year.
The accord gives both companies something they badly need. Lordstown Motors gets a partner that will hasten the startup’s move into large-scale production, which will help lower the high costs required to make EVs. Foxconn gets a plant in North America where it can build its open-source electric vehicle platform and do contract manufacturing for partners like Fisker Inc.
“It’s less about a facility sale than a strategic partnership,” Lordstown Motors Chief Executive Officer Dan Ninivaggi said in an interview. “You have to find a way to get scale in the auto industry. Foxconn has a vision. They’ve got enormous capabilities in manufacturing and they will be able to fill that plant faster than we could.”
The two companies are working on a manufacturing pact that would agree to a certain cost basis for the Endurance pickup. Lordstown Motors would pay a fee on top of that, Ninivaggi said. Foxconn will make the $50 million equity investment immediately regardless of what happens with talks for an assembly partnership.
The CEO said Lordstown Motors will keep its assembly lines that make the hub motors for each wheel of the Endurance and also the line that assembles the pickup’s battery pack.
Racing to Production
Lordstown is racing to get its Endurance pickup into production early next year. Even if the truck is well received by customers, the company won’t fully utilize its Ohio factory anytime soon. So selling the facility and operating in parallel with Foxconn could help the company better leverage the plant where GM employed 10,000 people at its peak.
The company ousted Steve Burns, its founder and CEO, in June over misstatements he made about Endurance orders. Lordstown has repeatedly warned that its status as a going concern is in doubt less than a year after merging with a special purpose acquisition company to go public.
Burns’s successor, Ninivaggi, said in an interview last month that he was looking for partners to help the company take full advantage of a plant that was once the Mahoning Valley’s biggest industrial employer. He added he was exploring all options to raise money.
Lordstown Motors has been under investigations by the U.S. Securities and Exchange Commission and the Justice Department after an internal probe concluded that prior management made inaccurate statements about pre-orders for the Endurance. The company is pushing to start deliveries of the pickup next year.
GM’s decision in 2018 to close the plant was a blow to then-President Donald Trump, who a year earlier discouraged rally-goers in the region from selling their homes because of all the jobs he vowed to bring back. Democrats seized on the development as a symbol of unfulfilled promises Trump made to voters in a key battleground state.
Betting on EVs
Foxconn, meanwhile, is hoping to replicate its smartphone success by building clients’ electric vehicles from the chassis up. It’s rapidly expanding its EV business as major tech companies from Apple to Xiaomi Corp. invest heavily in technologies for next-generation mobility. Over the past year, the Taiwanese company has launched an open EV platform, inked a manufacturing deal with Fisker and formed a partnership with Thailand’s state-owned conglomerate PTT Pcl.
Earlier this year, Chairman Young Liu of Foxconn’s flagship unit, Hon Hai Precision Industry Co., said the company was considering creating an EV manufacturing facility in Wisconsin as its first U.S. automotive outpost. With Foxconn bulking up its automotive muscle, it’s seen as a contender in the race to make EVs for Apple.
The company has had a controversial history of bringing its manufacturing capabilities to the U.S. It originally committed to investing $10 billion in a Wisconsin facility in exchange for billions of dollars in possible subsidies, a project championed by then-President Trump. That vision was never realized, and Liu said earlier this year he’s trying to figure out what to make at the location.
Foxconn will rely on Ohio as its main EV manufacturing base in North America, while the company will still continue to invest in Wisconsin as a key site for tech products, according to a person familiar with the plans.
One of the projects Foxconn will build at the Lordstown plant is Fisker’s Project Pear, which stands for Personal Electric Automotive Revolution, company CEO Henrik Fisker said in an interview. That model is scheduled to start production in the first quarter of 2024 with a minimum planned production of 150,000 vehicles a year, eventually scaling up to 250,000 annually, he said.
Fisker’s CEO said he doesn’t want to reveal too much about the design of his company’s Project Pear except to say that it will target young urban dwellers and sell at a starting price under $30,000.
“It doesn’t have a normal trunk or hatch,” he said. “It’s basically trying to come up with a really cool vehicle that could excite the new generation of buyers, but it fits in their lifestyle and budget. It would take people out of a Toyota Prius or BMW X1.”
Foxconn will build EVs for Lordstown Motors and Fisker at Ohio plant
Kirsten Korosec
Thu, September 30, 2021
Foxconn will build electric vehicles for Lordstown Motors as well as its other partner Fisker Inc. at a former GM factory in Ohio, under an agreement announced Thursday.
Lordstown Motors, the beleaguered electric vehicle company that became publicly traded via a merger with a special purpose acquisition company, said Thursday it reached a nonbinding agreement with Foxconn to sell its 6.2-million-square-foot factory. Lordstown purchased the factory in 2019 from General Motors.
Under the agreement, which has yet to close, Foxconn will pay $230 million for the facility. The deal excludes certain assets such as Lordstown's hub motor assembly line, battery module and packing line assets and certain intellectual property rights. Foxconn will also buy $50 million of Lordstown common stock.
The companies said they will negotiate a contract manufacturing agreement for Foxconn to assemble Lordstown's Endurance full-size pickup truck at the facility. Reaching a contract manufacturing agreement is a condition to closing the facility purchase. The parties have agreed to explore licensing arrangements for additional pickup truck programs.
The deal comes at a critical moment for Lordstown Motors, a cash-strapped startup turned SPAC that had a string of missteps earlier this year. In August, the company hired Daniel A. Ninivaggi, a longtime automotive executive and former head of Carl C. Icahn’s holding company, as CEO and a board member. The appointment came after months of tumult at the company, including the resignation of its founder and CEO Steve Burns. CFO Julio Rodriguez resigned following a disappointing first-quarter earnings report that revealed the company was consuming more capital than expected and unable to reach previously forecasted production numbers for its electric Endurance pickup truck.
The goal of the partnership, the companies said in its announcement, is to present both Lordstown Motors and Foxconn with increased market opportunities in scalable electric vehicle production in North America. That includes Foxconn's existing partnership with EV company Fisker Inc. (Lordstown and Fisker are separate companies and have no connection.)
In May, Fisker signed an agreement with Foxconn to co-develop and manufacture a new electric vehicle under a program called Project PEAR. Production on the Project PEAR car, which stands for Personal Electric Automotive Revolution, will be sold under the Fisker brand name in North America, Europe, China and India. Pre-production is expected tp begin in the U.S. by the end of 2023 and will then ramp up into the following year, Fisker told TechCrunch in an an August interview.
Fisker didn’t reveal the U.S. manufacturing location. The final decision would be Foxconn’s, Fisker noted at the time.
Fisker issued a statement Thursday welcoming the news from Foxconn.
"Achieving key program objectives such as time to market, access to a well-developed supplier ecosystem and overall cost targets were all important factors in the decision to locate manufacturing in Ohio," Henrik Fisker said in an emailed statement. "Since signing the agreement with Foxconn earlier this year, we have been working together intensively on all aspects of Project PEAR including design, engineering, supply chain and manufacturing. Fisker's commitment to volume manufacturing in the United States takes another important step forward today with the signing of this agreement."
Fisker also has another vehicle program in the works with a different contract manufacturer. The Fisker Ocean SUV will be assembled by automotive contract manufacturer Magna Steyr in Europe. The start of production is still on track to begin in November 2022, the company reiterated in its second-quarter earnings call. Deliveries will begin in Europe and the United States in late 2022, with a plan to reach production capacity of more than 5,000 vehicles per month during 2023. Deliveries to customers in China are also expected to begin in 2023.
Kirsten Korosec
Thu, September 30, 2021
Foxconn will build electric vehicles for Lordstown Motors as well as its other partner Fisker Inc. at a former GM factory in Ohio, under an agreement announced Thursday.
Lordstown Motors, the beleaguered electric vehicle company that became publicly traded via a merger with a special purpose acquisition company, said Thursday it reached a nonbinding agreement with Foxconn to sell its 6.2-million-square-foot factory. Lordstown purchased the factory in 2019 from General Motors.
Under the agreement, which has yet to close, Foxconn will pay $230 million for the facility. The deal excludes certain assets such as Lordstown's hub motor assembly line, battery module and packing line assets and certain intellectual property rights. Foxconn will also buy $50 million of Lordstown common stock.
The companies said they will negotiate a contract manufacturing agreement for Foxconn to assemble Lordstown's Endurance full-size pickup truck at the facility. Reaching a contract manufacturing agreement is a condition to closing the facility purchase. The parties have agreed to explore licensing arrangements for additional pickup truck programs.
The deal comes at a critical moment for Lordstown Motors, a cash-strapped startup turned SPAC that had a string of missteps earlier this year. In August, the company hired Daniel A. Ninivaggi, a longtime automotive executive and former head of Carl C. Icahn’s holding company, as CEO and a board member. The appointment came after months of tumult at the company, including the resignation of its founder and CEO Steve Burns. CFO Julio Rodriguez resigned following a disappointing first-quarter earnings report that revealed the company was consuming more capital than expected and unable to reach previously forecasted production numbers for its electric Endurance pickup truck.
The goal of the partnership, the companies said in its announcement, is to present both Lordstown Motors and Foxconn with increased market opportunities in scalable electric vehicle production in North America. That includes Foxconn's existing partnership with EV company Fisker Inc. (Lordstown and Fisker are separate companies and have no connection.)
In May, Fisker signed an agreement with Foxconn to co-develop and manufacture a new electric vehicle under a program called Project PEAR. Production on the Project PEAR car, which stands for Personal Electric Automotive Revolution, will be sold under the Fisker brand name in North America, Europe, China and India. Pre-production is expected tp begin in the U.S. by the end of 2023 and will then ramp up into the following year, Fisker told TechCrunch in an an August interview.
Fisker didn’t reveal the U.S. manufacturing location. The final decision would be Foxconn’s, Fisker noted at the time.
Fisker issued a statement Thursday welcoming the news from Foxconn.
"Achieving key program objectives such as time to market, access to a well-developed supplier ecosystem and overall cost targets were all important factors in the decision to locate manufacturing in Ohio," Henrik Fisker said in an emailed statement. "Since signing the agreement with Foxconn earlier this year, we have been working together intensively on all aspects of Project PEAR including design, engineering, supply chain and manufacturing. Fisker's commitment to volume manufacturing in the United States takes another important step forward today with the signing of this agreement."
Fisker also has another vehicle program in the works with a different contract manufacturer. The Fisker Ocean SUV will be assembled by automotive contract manufacturer Magna Steyr in Europe. The start of production is still on track to begin in November 2022, the company reiterated in its second-quarter earnings call. Deliveries will begin in Europe and the United States in late 2022, with a plan to reach production capacity of more than 5,000 vehicles per month during 2023. Deliveries to customers in China are also expected to begin in 2023.
Foxconn tentatively agrees to produce electric vehicles in Ohio, doesn't rule out Mount Pleasant
Enlarge
The 6.2-million-square-foot Lordstown Motors production facility that Foxconn has agreed to purchase for $230 million
LORDSTOWN MOTORS IMAGE
By David Schuyler – Digital Producer, Milwaukee Business Journal
Oct 1, 2021
Foxconn Technology Group has reached an agreement in principle to buy a former General Motors Corp. production plant in Ohio that could enable it to begin manufacturing electric vehicles for Fisker Inc., work that Wisconsin officials had been seeking to bring to Foxconn's facility in Mount Pleasant.
Under the tentative agreement, Hon Hai Technology Group, the Taiwanese contract manufacturing company better known as Foxconn, would buy a 6.2-million-square-foot assembly plant near Youngstown, Ohio, from Lordstown Motors Corp. (Nasdaq: RIDE), a developer of electric vehicles for the commercial fleet market, for $230 million. Foxconn would also produce Lordstown Motors' Endurance full-size pickup truck under contract and acquire certain rights to future Lordstown programs.
According to a joint press release announcing the agreement Thursday, the "facility would serve as a speed to market asset that would also support Foxconn's partner and customer, Fisker Inc."
“In addition to achieving the goal of moving ahead our timeline to establish electric vehicle production capacity in North America, it also reflects Foxconn’s flexibility in providing design and production services for different EV customers," Young Liu, chairman of Hon Hai Technology Group, said in the release. "This mutually beneficial relationship is an important milestone for Foxconn’s EV business and our transformation strategy."
Foxconn and California electric car startup Fisker are partners in developing a new electric vehicle under a deal announced in February. The companies have been considering multiple states to potentially manufacture Fisker's Pear electric vehicle starting in late 2023, and earlier this year talks were confirmed with officials at the Wisconsin Economic Development Corp.
The 6.2-million-square-foot Lordstown Motors production facility that Foxconn has agreed to purchase for $230 million
LORDSTOWN MOTORS IMAGE
By David Schuyler – Digital Producer, Milwaukee Business Journal
Oct 1, 2021
Foxconn Technology Group has reached an agreement in principle to buy a former General Motors Corp. production plant in Ohio that could enable it to begin manufacturing electric vehicles for Fisker Inc., work that Wisconsin officials had been seeking to bring to Foxconn's facility in Mount Pleasant.
Under the tentative agreement, Hon Hai Technology Group, the Taiwanese contract manufacturing company better known as Foxconn, would buy a 6.2-million-square-foot assembly plant near Youngstown, Ohio, from Lordstown Motors Corp. (Nasdaq: RIDE), a developer of electric vehicles for the commercial fleet market, for $230 million. Foxconn would also produce Lordstown Motors' Endurance full-size pickup truck under contract and acquire certain rights to future Lordstown programs.
According to a joint press release announcing the agreement Thursday, the "facility would serve as a speed to market asset that would also support Foxconn's partner and customer, Fisker Inc."
“In addition to achieving the goal of moving ahead our timeline to establish electric vehicle production capacity in North America, it also reflects Foxconn’s flexibility in providing design and production services for different EV customers," Young Liu, chairman of Hon Hai Technology Group, said in the release. "This mutually beneficial relationship is an important milestone for Foxconn’s EV business and our transformation strategy."
Foxconn and California electric car startup Fisker are partners in developing a new electric vehicle under a deal announced in February. The companies have been considering multiple states to potentially manufacture Fisker's Pear electric vehicle starting in late 2023, and earlier this year talks were confirmed with officials at the Wisconsin Economic Development Corp.
Enlarge
A view of Foxconn's Mount Pleasant campus from October 2020
CURTIS WALTZ, AERIALSCAPES.COM
In a separate statement, Foxconn said Wisconsin could still play a role in its electric vehicle strategy in the future.
"While initial electric vehicle production takes place in Lordstown, Foxconn’s assets in Wisconsin will continue to serve as a potential location for additional investment for Foxconn’s electric vehicle growth in the United States and continue to be the location for data infrastructure hardware and Information and Communication Technology production," Foxconn said.
The Mount Pleasant site is challenged by a Wisconsin state law that prohibits vehicle manufacturers from selling vehicles directly to customers. Fisker chairman and CEO Henrik Fisker was recently quoted saying Fisker wants to manufacture cars in a state where it could also sell them directly to customers.
Bills have been floated multiple times in recent years to change the Wisconsin law to allow that. The most recent proposal was introduced in late July.
Foxconn's deal with Lordstown Motors remains non-binding and is subject to the negotiation and execution of definitive agreements.
Under the tentative agreement, Foxconn also agreed to buy $50 million of Lordstown Motors' common stock and lease a portion of the plant back to Lordstown Motors for its Ohio-based employees. Foxconn also agreed to offer employment to Lordstown operational and manufacturing employees.
Lordstown Motors has been lauded for buying the shuttered General Motors auto plant and for bringing back hundreds of jobs to the plant.
But the electric vehicle developer, which was expecting to start producing its first Endurance electric truck models, ran into trouble. In early June, the electric vehicle developer revealed that it had insufficient cash to begin producing and selling its Endurance truck in late September as planned.
The company also said the production stall cast "substantial doubt" on whether it would be able to operate for a year without a cash infusion. Days later, the company's CEO and chief financial officer resigned following an internal investigation that found the company had misstated the demand for Endurance.
Mary Vanac of the Cleveland Business Journal contributed to this report.
A view of Foxconn's Mount Pleasant campus from October 2020
CURTIS WALTZ, AERIALSCAPES.COM
In a separate statement, Foxconn said Wisconsin could still play a role in its electric vehicle strategy in the future.
"While initial electric vehicle production takes place in Lordstown, Foxconn’s assets in Wisconsin will continue to serve as a potential location for additional investment for Foxconn’s electric vehicle growth in the United States and continue to be the location for data infrastructure hardware and Information and Communication Technology production," Foxconn said.
The Mount Pleasant site is challenged by a Wisconsin state law that prohibits vehicle manufacturers from selling vehicles directly to customers. Fisker chairman and CEO Henrik Fisker was recently quoted saying Fisker wants to manufacture cars in a state where it could also sell them directly to customers.
Bills have been floated multiple times in recent years to change the Wisconsin law to allow that. The most recent proposal was introduced in late July.
Foxconn's deal with Lordstown Motors remains non-binding and is subject to the negotiation and execution of definitive agreements.
Under the tentative agreement, Foxconn also agreed to buy $50 million of Lordstown Motors' common stock and lease a portion of the plant back to Lordstown Motors for its Ohio-based employees. Foxconn also agreed to offer employment to Lordstown operational and manufacturing employees.
Lordstown Motors has been lauded for buying the shuttered General Motors auto plant and for bringing back hundreds of jobs to the plant.
But the electric vehicle developer, which was expecting to start producing its first Endurance electric truck models, ran into trouble. In early June, the electric vehicle developer revealed that it had insufficient cash to begin producing and selling its Endurance truck in late September as planned.
The company also said the production stall cast "substantial doubt" on whether it would be able to operate for a year without a cash infusion. Days later, the company's CEO and chief financial officer resigned following an internal investigation that found the company had misstated the demand for Endurance.
Mary Vanac of the Cleveland Business Journal contributed to this report.
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