Tag Archives: factory news

Lordstown Motors Sells Home to Foxconn

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Lordstown Motors

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The troubled Lordstown Motors has announced it will be selling its Ohio production facility to the Taiwanese Hon Hai Precision Industry, better known as Foxconn. But this is not a case of the prospective automaker offloading its assets so it can pay off its debts in full retreat. Instead, Lordstown has asserted this is a necessary partnership that will help guarantee it can still deliver the all-electric Endurance pickup truck.

Terms stipulate that Lordstown Motors will sell the sprawling factory to Foxconn for about $230 million. Two years ago, the site was purchased from General Motors for a very breezy $20 million after the Detroit-based manufacturer decided to abandon the Chevrolet Cruze. Foxconn will also be buying up $50 million worth of common stock and effectively take responsibility for production at Lordstown Assembly. However there is a laundry list of things that need to be done before pickup assembly is even an option. 

The duo have yet to formalize their agreement as to how the Endurance will be assembled (with Foxconn presumed to take the lead) or collaborate with the relevant suppliers so that production can be maintained. They will also need to assemble the vehicles that will be used for the testing, validation, and verification, in order they can get the necessary regulatory approvals for moving forward.

Foxconn is assumed to be jumping in because it’s a multinational entity with trillions in revenue and ties dispersed across the technology sector and eager to expand into vehicle production. Some of its biggest clients have included Amazon, Apple, BlackBerry, Cisco, Dell, Fisker, Google, Hewlett-Packard, Huawei, Intel, Microsoft, Motorola, Nintendo, Sega, Sony, Toshiba, Vizio, and Xiaomi. Globally, Foxconn has more than a million employees and it remains the largest employer in mainland China by far.

Despite the prospective automaker having gotten itself into trouble of late (not that Foxconn is lacking in terms of scandal), news of the deal caused Lordstown shares to increase by as much as 12 percent on Thursday evening. Bloomberg reported that the stock climbed by 8.4 percent during regular hours, closing at $7.98.

From Bloomberg:

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.”

Foxconn’s manufacturing prowess is irrefutable and it’s likely the firm was responsible for manufacturing at least one gaming console, computer, or cell phone you’ve previously owned. It also appears to be getting the better deal here since Lordstown had grown vocally desperate over the summer. Finances had reached a point where the company no longer knew if it would be able to reach the production phase and it is currently under investigation by the Securities and Exchange Commission and Department of Justice over its deal to go public — in addition to some allegedly false or misleading statements made by former management, including company founder and ex-CEO Steve Burns.

While the partnership does provide the cash-strapped EV startup with more funding, Foxconn now owns its only manufacturing facility and has the ability to jumpstart vehicle production ahead of plans to assist Fisker (likely using the same facility).

On a longer timeline, this could bode similarly well for Apple’s sporadic interest in building an automobile. But it’s a little early to presume anything right now. We’ll be impressed if Lordstown Motors manages to adhere to its promise of delivering its pickup within the first half of 2022.

<img data-attachment-id="1766264" data-permalink="https://www.thetruthaboutcars.com/2021/06/lordstown-deathwatch-another-unflattering-sec-filing-emerges/lordstown-motors-endurance-prototype/" data-orig-file="https://www.thetruthaboutcars.com/wp-content/uploads/2021/06/Lordstown-Motors-Endurance-prototype.jpg" data-orig-size="2000,1333" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Lordstown Motors Endurance prototype" data-image-description="

Lordstown Motors

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[Image: Lordstown Motors]

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Detroit Wrapping on Ventilator Production, Returning to Cars

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John Gress Media Inc/Shutterstock

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General Motors and Ford Motor Company are about to conclude their prolonged stint of ventilator production. In case you were unaware, these businesses typically manufacturer automobiles (cars, for the layperson) and have allocated a portion of their factory space to build medical equipment that was assumed to be useful during the pandemic. However, the United States now has more ventilators than it knows what to do with, and most of them seem like they won’t be required — so it’s mission accomplished, unless COVID-19 suddenly becomes a much more vicious illness.

Either way, GM and Ford both plan to re-prioritize vehicle production. The Blue Oval moved core staff off ventilator lines and back to their normal places of assembly months ago. Some of the remaining temporary workers hired to assist with the medical equipment are said to have an opportunity building the new Ford Bronco. Meanwhile, GM says it wants to move ventilator production to a facility in Kokomo, Indiana, next month, where it will hand operations over to Ventec Life Systems as it regains the union employs allocated for the project. Temporary hires will be absorbed by Ventec.

According to Reuters, GM and Ventec are in the last leg of completing their joint contract to deliver 30,000 critical care ventilators by the end of August under a $489 million contract with the federal government. Ford has reportedly assembled around 47,000 of the 50,000 ventilators it agreed to supply with help from General Electric Co. That contract is worth roughly $336 million.

From Reuters:

[Health and Human Services] said it has received more than 69,000 ventilators assembled by GM, Ford and their partners, and “both of these delivery schedules are nearly complete.”

Ford and GM earlier this year said they would employ a total of as many as 1,500 people on ventilator assembly lines. Automakers likened the efforts to their switch from making cars to tanks and planes during the Second World War.

While roughly 12,000-15,000 ventilators have been issued to U.S. hospitals, the Health and Human Services (HHS) department reported that the government has nearly 110,000 ventilators stockpiled. While President Trump suggested a large portion of those will be issued to other countries in need, demand has come down immensely. We know the United States shipped heaps of personal protective equipment to China before COVID-19 officially became a global pandemic, and that the plan was to continue doing so while incorporating breathing machines (though the latter would not be donated) once the U.S. had a reliable supply for itself. It was also made clear that other nations would be given priority, as Trump said he planned to donate 200 to the United Kingdom in April.

But treatment strategies changed.

Invasive ventilators have been replaced with sleep apnea machines for at-risk patients or simply rolling them onto their sides and giving them helpful prescriptions. The HHS also confessed that the U.S. probably never needed quite so many units as were being manufactured.  “States initially requested far more ventilators than they actually needed,” an HHS spokeswoman explained, adding that orders were placed at at time where the nation had more questions than answers.

Even though ventilators are being taken off the table at automotive plants, the industry will still manufacture personal protective equipment (masks, face shields) for the foreseeable future. Demand for PPE has not diminished in the slightest, and the situation is unlikely to change while face coverings are still required to interact with the public. It’s a situation we don’t see changing, even as Sweden (a country that went largely mask-free, didn’t do lockdowns, and still avoided mass contagion) has started to claim that masks are effectively useless against the virus. The rhetoric is quite different here, though not terribly distinct from most first-world nations that wanted to exercise the maximum amount of caution.

Presidential candidate Joe Biden recently said that “every governor should mandate mandatory mask wearing” and recommended their continued use until at least November of this year. The right has been more flippant about the usefulness of face coverings in general, but even President Trump offered his own tepid endorsement this summer.

We figure this will result in automakers tossing together masks until at least 2021, though the demand this places on companies is much lower than ventilator manufacturing and shouldn’t interfere with the core business of automakers.

[Image: John Gress Media Inc/Shutterstock]