Lordstown Motors – the EV startup that bought the GM Lordstown plant in Ohio back in 2019 – has filed for Chapter 11 protection following a dispute with Taiwanese electronics manufacturer Foxconn.
According to a report from Reuters, the electric vehicle manufacturer has filed a complaint in bankruptcy court alleging that Foxconn conducted in a fraudulent manner, and made a series of false promises related to the previous arrangement of investments into Lordstown.
A Lordstown Motors spokesperson alleged that Foxconn engaged in a “pattern of bad faith” that caused “material and irreparable harm.”
It’s worth noting that the EV startup warned back in May 2022 that it may be forced to file for bankruptcy over uncertainly with the Foxconn investment. For its part, the Taiwanese electronics manufacturer has claimed that Lordstown breached the contract when the automaker’s stock price fell below $1 per share.
In the new lawsuit, Lordstown Motors is attempting to paint Foxconn as an inconsistent partner, with constantly shifting goals during collaboration with the automaker’s future vehicles, including failing to meet funding commitments and refusing to engage with Lordstown on initiatives the electronics manufacturer allegedly directed and signaled to support.
For reference, Foxconn previously invested roughly $52 million into Lordstown as part of the aforementioned agreement, and currently holds an ownership stake of approximately eight percent.
As a reminder, Lordstown Motors has been through a rollercoaster ride of ups and downs over the past several years. As previously mentioned, the EV startup purchased the GM Lordstown plant after General Motors ceased production of the Chevy Cruze. For selling the plant at a discounted rate, The General received roughly eight million shares of Lordstown.
Following a short-seller report in early 2021, General Motors sold its stake in the EV startup, with cofounder and CEO Steve Burns ultimately resigning. Afterwards, Lordstown Motors began acquisition talks with Foxconn, who eventually ended up purchasing the Lordstown plant for $230 million, while an additional $50 million investment in the electric vehicle manufacturer. The acquisition was completed in May 2022.
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Comments
Who believed they had a snowballs chance? Mary should buy the plant back at a big discount and build the Trax there.
How much taxpayer money disappeared into this in the form of grants and credits?
Which leads me to ask: how many companies in the electric car business are series as opposed to those being an automotive form of Solyndra, or however it was spelled?
Bingo….where there’s a government push (better known as subsidies), there are always strings attached. Always.
Everything is fine, until the free money dries up…
Almost no one understands how much capital is needed to start an auto manufacturing business. If Musk and his family weren’t so filthy rich, Tesla would have gone belly-up long ago.
That plant seems damned. From the Vega debacle to this mess, it’s always Lordstown.
I know Christine was a Plymouth but were any of her parts built there?
It is a ready to run TRUCK PLANT..And it is configured for E-trucks..HMMMM? Sneaky planning by big Mary B?
Impala, Camaro, G series vans, Cavaliers and the Cruise all are absolute successes from Lordstown Assembly
Camaro was not built there. It was assembled at Norwood. Lordstown was the Vega plant.
Correct it ws the first gen Firebird.. before my time
GM should buy the plant back, then tool up to produce either the Cruze again, or the Trax. No excuses.
GM should take over the plant and assets and complete the product making it an additional GM product.
Gee, both “Fox” and “con” are right there in the name for everyone to see. Scam? Whodathunkit….
Seriously though, who didn’t see this coming? GM made a big mistake selling the Lordstown plant when it could have been idled for changing over to making subcompact crossovers for the NA market. The South Korean plants could have made up the numbers and tackle global exports with both LHD and RHD models. But GM… always focusing on short term benefits at the expense of long term gains.