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Trump touted Lordstown Motors bigtime in 2020. Lordstown declared bankruptcy today. [1]
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Date: 2023-06-27
In “Lordstown Motors files bankruptcy, sues Foxconn”, Reuters correspondents Mike Spector, Joseph White and Dietrich Knauth report that this morning electric vehicle startup Lordstown Motors, founded in 2018 and named for the former GM plant in Lordstown, Ohio, filed for bankruptcy and put itself up for sale. At the same time, Lordstown accused the Taiwanese company Foxconn of breaking promises to invest up to $170 million more into the EV maker. Foxconn in turn has said Lordstown breached their agreement when its stock fell below $1 per share.
Lordstown Motors was founded in 2018 by executive Steve Burns. After GM closed its Lordstown, Ohio manufacturing plant in 2019, Trump put pressure on GM CEO Mary Barra, saying “I asked her to sell it or do something quickly.” Barra complied, lending Lordstown Motors $40 million to buy and retrofit the plant. When the deal was announced, Trump tweeted “I have been working nicely with GM to get this done…. With all the car companies coming back, and much more, THE USA IS BOOMING.”
Trump then used Lordstown as a prop during his 2020 presidential campaign. In September 2020, he even helped market Lordstown’s Endurance pickup on the South Lawn of the White House, saying things like “The area was devastated when General Motors moved out, and then we worked together, and we made the deal on the plant” and “This is a great technology” and “I heard the sales are great”. Lordstown had not yet sold any vehicles.
In January 2021, the Endurance prototype burned during testing. Lordstown Motors gobbled up its cash, sold the plant and hired Foxconn to try to make the pickup, and made a deal with Foxconn to invest. Lordstown executives made this deal with Foxconn even though they surely knew Foxconn’s reputation — see, for example, my diaries “Foxconn behind on its $100 million pledge to U. of Wisconsin, while luring UW students to Taiwan” and “Foxconn and Republicans bait-and-switch in Wisconsin”.
Unfortunately for its workers, Lordstown could not actually build the pickup that Trump had promoted. By this year Lordstown had made only 31 pickups, recalling most of them and selling only six. Its CEO Steve Burns resigned in 2021 and gradually cashed out his stock, making $66 million. As Burns has completely sold his stake, he will not lose money due to Lordstown shares becoming essentially worthless during bankruptcy.
Presumably Trump and his fellow Republicans will blame the Lordstown fiasco on Biden. Because that’s what they do.
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