Editor’s Note: This is the second biggest story of 2021 as voted on by The Vindicator.
LORDSTOWN – 2021 has been a tumultuous year for Lordstown Motors Corp. and one – most of them, at least – that the startup electric vehicle maker would like to put in its rearview mirror.
It was Jan. 13 in a Detroit suburb when a prototype of the company’s flagship vehicle, the Endurance truck, known in the industry as a development mule, caught fire during its very first test drive. The vehicle was destroyed and the business suffered a loss of $ 150,000 as a result, according to details of a fire report.
Two months later, Hindenburg Research, a company known for its short-lived stocks, released a damning report on Lordstown Motors, saying its backlog appeared to be “almost entirely bogus” and that the company had misled investors.
The report gave rise to several lawsuits by investors claiming they had been misled.
On April 27, this newspaper reported that Lordstown Motors had failed to pay its first half of 2020 property tax payment in March and incurred a hefty penalty for doing so.
The next day the company paid the $ 570,958 it originally owed to the Trumbull County Treasurer’s Office and an additional fine of $ 57,095, the company was fined for non-payment of four properties she owns in Lordstown.
A spokesperson for the company attributed the case to an “unfortunate administrative error”.
It was in June when a management reshuffle rocked the company with the abrupt departures of founder and CEO Steve Burns and CFO Julio Rodriguez. No reason was publicly given for their removal, however, on the same day – June 14 – the company admitted that inaccurate statements had been made regarding the truck’s pre-orders.
The revelation was made by a special committee formed to examine the allegations made in the Hindenburg report, which the committee determined to be mostly false and misleading.
At one point, the company boasted of having had over 100,000 pre-orders for the truck.
Burns and Rodriguez walked away with hefty severance packages – Burns was to receive $ 750,000 over 18 months and Rodriguez, $ 200,000 over six months.
Several months later, in November, Burns sold more than 3.2 million shares of the company, earning him $ 3.2 million. He remains the main shareholder of the company.
Throughout the year, the company’s share price has fallen by 80%. It’s a problem that continues to haunt Lordstown Motors, but there have been intermittent gains over the months.
In August, the company announced the appointment of its new chief executive, Dan Ninivaggi, an automotive industry veteran.
In an interview with this newspaper on the day it was announced – August 26 – Ninivaggi said he had followed events as they unfolded with the company, but was determined not to. let affect the future of the company.
âThey are in the past; there is a process to resolve these issues, âsaid Ninivaggi. “I’m going to spend as much time as possible focusing on the future, getting this truck out and not on what happened in the past.”
Prior to her appointment, interim CEO Angela Strand announced in August that the company was exploring partnerships to take full advantage of the capabilities of the company’s plant, General Motors’ former assembly plant in Lordstown.
Those plans became clearer in late September, when the company announced it had an agreement in principle with Taiwanese electronics giant Foxconn to buy the 6.2 million square foot plant for $ 230 million.
Foxconn, well known for making Apple’s iPhone, made an initial down payment of $ 100 million. He accepted payments of $ 50 million on February 1 and no later than April 15, subject to certain conditions. The balance, along with reimbursement of certain operating and installation costs incurred from September 1 through closing, will be paid at closing, which is scheduled for April 30.
The contract also includes the parties agreeing to pursue a contract manufacturing agreement for Endurance that must be signed prior to closing and to pursue a joint venture agreement to co-design and develop vehicle programs for the global commercial fleet market. .
But it was also in November that the company announced it would delay commercial production and delivery to Endurance customers until the third quarter of 2022 due to obstacles that have delayed assembly of necessary pre-production vehicles. validation and approval of the entire vehicle.
That same month, chairman Rich Schmidt, who had been with Lordstown Motors from the start, resigned. He was replaced by Edward T. Hightower, who has 30 years of experience in product development, engineering, manufacturing, sales and leadership roles with Ford, BMW and GM.
Also during the year, LMC was the subject of an investigation by federal law enforcement and an investigation by the United States Securities and Exchange Commission regarding its October 2020 merger with the company d special purpose acquisition DiamondPeak Holdings.