Mike Pence, the former vice president of Vice Presidents, rode in an electric pickup made by Lordstown Motors one year ago and declared it a new day at the Mahoning Valley.
Ohio officials hail the company as the savior of the region. General Motors closed down the Chevrolet Cruze operations and took thousands more union jobs. It was bold to promise that Lordstown would produce trucks with electric power equal to 75 miles per gallon.
The future of the plant is now in doubt as Lordstown has been subject to multiple investigations. There are also allegations that executive misled investors regarding vehicle pre-orders. Although politicians cheered on the deal, some claim there were warning signs right from the start.
Bernie Moreno (a Cleveland-based car dealer who is also running for the U.S. Senate), said that “the political pressure was eased.” I believe the politicians that could have made a significant difference…I think their magic thinking was what they believed.”
We got to this point!
Soon after Gov. Mike DeWine, and Lt. Governor. Jon Husted won the 2018 election, they got a call that set off alarm bells: GM was planning to shutter its Lordstown operation.
Husted stated, “Welcome in office!” during a recent interview. We hadn’t been sworn into office yet. We were literally working to save that facility from that point on.
The writing was clearly on the wall, even though it seemed obvious in hindsight. GM had already ended the second and third shifts of its plant, before announcing that in November 2018, it would “unallocated.” Officials at GM said that the company was making this move as part of an overall effort to concentrate more on electric and autonomous vehicles following years of decline in Cruze sales.
People were just f ***** pissed that you are laying us off, and beginning a new Mexican product. Dave Green was the ex-president of United Auto Workers Local 11.12.
Lordstown was tumultuous for several months, as both workers and elected officials urged GM to make another car out of the facility. Former President Donald Trump used it as a lightning rod to criticize CEO Mary Barra’s disruption of the economy in an important area for his 2020 campaign.
Barra was presented by Moreno with a plan to maintain Cruze production in Lordstown. He would purchase the cars from GM and operate a ride-sharing company that employs professional drivers. Lordstown Motors Corp. purchased the plant instead. It promised to employ 400 people for its Endurance pickup truck.
Steve Burns, former CEO of the company said that they were “essentially reinventing electric cars”.
Mike Gibbons (an investment banker) was an early supporter of Lordstown. He is currently running for the Republican nomination to the Ohio Senate seat. Forbes reports that Brown Gibbons Lang & Co., the firm he managed to raise $450 million to help the company get off the ground. Gibbons described the transaction as exciting.
After combining with DiamondPeak, Lordstown Motor Corp. became public in the last year.
Gibbons stated in a statement that he was proud of his efforts to create jobs for the Mahoning Valley.
Moreno stated that he had been approached by investors but decided not to invest. He said that he wanted to see the company succeed but had concerns about technology.
He said, “I don’t know what others saw.” “I know that what I saw was extraordinarily unrealistic…Sometimes we will things to happen.”
Trouble in Lordstown
Lordstown began 2021 with rocky feet after the pandemic coronavirus.
According to the New York Times, one prototype of Endurance caught on fire in Michigan and another made only 40 miles in an off-road race held in California. Hindenburg Research published a damning report in March that strongly accused Burns, accusing him of exaggerating the number of pre-orders received and promoting unrealistic production times.
Husted stated, “It quickly became apparent to us that their near-term perspectives were overstated by the former CEO.”
Lordstown also admitted in June that pre-orders disclosures were “in some respects inaccurate”. Officials disagreed with other portions of the Hindenburg report. Both the Securities and Exchange Commission and Department of Justice have begun an investigation into concerns about pre-orders and DiamondPeak’s merger.
A SEC filing earlier this month stated that Lordstown faces six suits alleging company officials made misleading and materially false statements about pre-orders, production schedules and other matters.
According to the filing, the company was cooperating in federal investigations and stated that production will be limited for the Endurance beginning in September. Lordstown announced Monday that it reached a deal with an investment firm to raise $400 million over four years, which officials say will help kick-start production.
“We always expected we would have many bumps in the road, as even the most successful EV companies have had, but we don’t intend to be deterred from achieving two goals: first, continuing to create good jobs for Lordstown’s workers, and second, designing and manufacturing high-performance, environmentally-friendly full-size electric pick-up trucks,” chief operating officer Jane Ritson-Parsons said in a statement.
“I have never felt really good”
Ohio officials supporting Lordstown wait to see if it fulfills its promises to the Mahoning Valley.
Senator Sherrod Brown wrote to Angela Strand, executive chairwoman earlier this month to request that she share details about the company’s plans to address the recent investigation. He also asked Strand to get together with the United Auto Workers union members and create a “collaborative partner.”
Brown stated that “Your company came to the Mahoning Valley with the declared desire to transform this region into a ‘Voltage Valley.'” Northeast Ohio can be a leader in electric vehicle technology if it succeeds. We can all support this vision.
Brown stated that he had viewed Lordstown from the start with some doubt because so many businesses have entered the Mahoning Valley promising promises they wouldn’t keep. Everyone was still excited.
Brown stated, “I have never felt so good.” I was optimistic. “It was my responsibility to figure out how to make it work.
Sen. Rob Portman, who was closely involved with Brown in obtaining answers to the GM closing question, declined to speak to this reporter due to the pending DOJ investigation. According to a spokeswoman, he is closely monitoring the situation and remains focused on what is best for workers.
Husted stressed that Lordstown was not the only opportunity to help transform the area into Voltage Valley, but that he did hope it could be part of that equation. He said that company executives must talk to the community first and address the issues that hinder production.
Husted stated, “They created a hole in their credibility and it’sn’t just with them.” It’s the market.
Haley BeMiller, a journalist for USA TODAY Network Ohio Bureau serves the Columbus Dispatch and Cincinnati Enquirer.
Publited at Thu 29 July 2021, 02:46:02 (+0000).