Foxconn officially announced that it will buy the former General Motors Lordstown, Ohio plant from struggling EV startup Lordstown Motors. This will give the iPhone assembler its very first automobile factory and a second chance to establish a US manufacturing base. In an effort to diversify from smartphones and laptops, the Taiwanese conglomerate spent the past year purchasing or partnering with electric vehicle companies.
The two companies announced Wednesday that they've agreed to the framework deal first announced in September, meaning Foxconn will pay Lordstown Motors $230 million for the 6.2-million-square-foot factory. Foxconn also has agreed to contract-manufacture the Endurance, Lordstown Motors’ electric pickup truck. The deal is expected close by April 2019.
After GM had closed down the plant, the startup purchased it from GM in 2019. This decision angered Donald Trump. Trump encouraged Lordstown Motors to purchase the factory, tweeting that it was "GREAT NEWS for OHIO!" Mike Pence was invited to an event at the White House, where the startup presented the Endurance.
Lordstown Motors urgently needs the money
Lordstown Motors has had a difficult time since its public listing in 2020, when it raised nearly $700 million. After a short-selling research company raised fraud allegations, it is currently being investigated by the Securities and Exchange Commission and Department of Justice. Lordstown Motors announced Wednesday that Rich Schmidt, the president, has resigned. The startup had previously stated earlier this year that it would run short of cash in May 2022 if it does not receive additional funding.
Foxconn's Ohio factory is the second place where Trump overlaps. Foxconn is now at Ohio's second location. The first was in Wisconsin where Trump referred to Foxconn’s proposed LCD factory as the eighth wonder of the universe. Since then, the plans have been drastically revised and Foxconn has done very little other than raze large areas of land and build empty buildings.
Lordstown Motors will still rent space at the Ohio plant. On Wednesday, Foxconn announced that it will collaborate with Foxconn in order to develop vehicles for the new EV platform from the Taiwanese conglomerate. Fisker Inc. will also use space in the factory.
Lordstown Motors stated earlier this year that it has spent $240 million to upgrade the factory in preparation for the Endurance. It will also keep its production lines for electric motors and battery pack assembly.