Retiring Guy's Digest: GET ME REWRITE: Slow drip of bad news out of Lordstown continues

Screenshot from Retiring Guy video

Manufacturing Business Technology, 5/4/2022

But since then, the road has been rocky. In March it was revealed that the deal hit a snag as the two parties were reportedly struggling to come to terms on certain conditions. More recently, US regulators have cleared the deal, but Lordstown has confirmed the conditions to close still have not been met and instead of closing on the deadline of April 29th, Foxconn issued a press release.
In it, the EV company detailed that the variables in flux include “further negotiation and execution of a contract manufacturing agreement.” And while Lordstown said the talks are continuing, the stakes are high.
Foxconn has already paid the $200 million in down payments required by the agreement, and if the two parties can’t realize closing terms by May 14th, Lordstown is then obligated to repay this. Lordstown said in its press release that it can’t repay the money, and that Foxconn is entitled to take its assets instead.

5/3/2022 update starts here

Business Journal, 5/2/2022

Shares of Lordstown Motors Corp. traded at their lowest level at one point on Monday as investors reacted to last week’s announcement that a deadline to reach an agreement between the company and Foxconn would be extended to May 14.
Lordstown Motors Corp., which trades under the ticker symbol RIDE, saw its stock value drop 4.5% Monday, closing at $2.08 per share. Just before 2 p.m., shares of RIDE traded at $1.96, a new low for the EV startup.
The company announced after the market closed on Friday that a proposed asset purchase agreement and contract manufacturing agreement with Taiwan-based Foxconn would be extended to May 14.
The initial closing date had been set for Saturday, April 30.

5/2/2022 update starts here

the deep dive, 5/1/2022

The great concern for Lordstown in all this is that Foxconn has not always honored (at least the spirit of) agreements it has reached in the United States. For example, in May 2017, the company reached an agreement with the state of Wisconsin to invest US$10 billion in a proposed liquid crystal display (LCD) screen manufacturing plant in the state. It would have created 13,000 jobs.

Nothing approaching that scale of investment ever happened. The town and county where the factory was to be built issued US$400 million of bonds to support the development. In turn, a 4,000-acre industrial park was created on which reportedly only five lightly-used structures have been built. In April 2021, Foxconn renegotiated an agreement with the state that now calls for a planned investment of only US$672 million and would create just 1,454 jobs. [emphasis added]

4/30/2022 update starts here

Bloomberg, 4/29/2022

When it comes to Foxconn, it's always the same old song.

Lordstown Motors Corp. agreed to push back the deadline to sell its Ohio factory to Hon Hai Precision Industry Co Ltd., known as Foxconn, dragging out the closure of the vital partnership and offering no guarantee that it will get done. [emphasis added]

Lordstown said late Friday that the Committee on Foreign Investment in the U.S. cleared the sale April 9. While Foxconn made a final $50 million down payment on the deal on April 15 under a prior agreement to advance $200 million, the transaction remains subjects to additional conditions, including “further negotiation and execution of a contract manufacturing agreement.”

3/25/2022 update starts here.

WKBN, 3/24/2022

There was, however, a section that updated the status of the Lordstown/Foxconn partnership. It read: “To date, the Company has not reached an agreement with Foxconn EV Technology, Inc. or its affiliates to jointly develop vehicles off the MIH platform or with regard to any financing from Foxconn. No assurances can be given that any agreement will be reached or as to the terms of any such agreement.”

Dear Lordstown,

Might as well learn from Wisconsin's experience. You've been FoxConned!

Best,

Retiring Guy

3/2/2022 update, "And the hits to Lordstown's prospects just keep on coming", starts here.

Top headlines: The Drive, 3/1/2022; Taipei Times, 3/2/2022

Bottom headlines: The Verge, 3/1/2022; Detroit Free Press, 3/1/2022

3/1/2022 update, "Foxconn goes to Lordstown and production goals are slashed 90%", starts here.

CNBC, 2/28/2022

Embattled electric vehicle start-up Lordstown Motors expects to produce and sell up to only 3,000 vehicles through next year, the company announced Monday.
The plans include 500 vehicles this year, with production slated to begin in the third quarter — a year later than expectations cited by Lordstown when it went public through a special purpose acquisition company in October 2020.
The total sales and production figures also are far below the amount former management sold investors on in the runup to the public listing. Lordstown initially expected to build 2,000 Endurance pickups in its first year, followed by 32,000 units during the first full year of production.

1/31/2022 update, "Foxconn goes to Lordstown and Fiskar's Project Pear goes to India?", starts here.

Headlines: top, bottom

1/28/2022 update, "Remember when they'd "possibly be making electric cars in Wisconsin?", starts here.

Madison.com, 7/8/2021 (red box added)

Well, here we go again!

Inside EVs, 1/267/2022 (red box added)

Last paragraph.

It is understood that Foxconn will build production versions of the said EV concepts for automotive customers rather than under its own automotive brands. Whether the Taiwanese company will build any of these MIH platform-based EVs at its newly acquired plant in Lordstown, Ohio is anyone's guess at the moment. [emphasis added]

12/4/2021 update, "Foxconn Goes to Lordstown and its stock takes a beating", starts here.

The Business Journal, 12/4/2021

The electric vehicle manufacturer’s stock, which trades under the ticker symbol RIDE, slid precipitously throughout the week and lost more than 17% of its value over a five-day period. The stock has declined more than 80% year-to-date.
In November, the company announced that it would delay commercial production of its inaugural vehicle, the all-electric Endurance pickup, until the third quarter of 2022. A regulatory filing on Nov. 16 also showed that former CEO Steve Burns, who resigned in June, had sold off more than 3.2 million shares worth more than $18 million.

11/14/2021 update, " If you have to ask, you haven't been paying attention", starts here.

Top headline: WKBN, 9/30/2021

Bottom headline: Market Watch, 7/31/2017 (red box added)

WKBN excerpt: Hope has been running low around the Valley about Lordstown Motors, but there appears to be another rainbow on the horizon — a reported deal for Lordstown Motors to sell the factory to Foxconn.

11/11/2021 update, "Don't pop that champagne cork just yet!", starts here.

Globe News Wire, 11/10/2021

Young Liu, Chairman of Hon Hai Technology Group, commented “This partnership marks the commencement of integrating our resources with Lordstown Motors to develop Ohio into Hon Hai’s most important electric vehicle manufacturing and R&D hub in North America. As we look to inject Hon Hai’s software and hardware capabilities in the information and communications industry with the wealth of automotive experience that resides in this town and our partners, we will be able to provide customers with more real-time and efficient Electric vehicle products.

Once upon a time......

Forbes (August 1, 2017)

At the very least, the Badger State apparently will be able to boast that it's home to North America's first flat-panel liquid-crystal display factory -- marking the return of consumer-electronics production to the Midwest once characterized by companies such as Zenith and Admiral that made early TVs and radios in Chicago.”
At best, Foxconn's investment truly will help create a "Wisconn Valley" that would become a new electronics-manufacturing ecosphere, with multiple suppliers and logistical networks extending from southeastern Wisconsin like energizing economic tendrils, into the rest of the state and throughout the entire Upper Midwest.

10/20/21 update, "Chairman Young Liu inspires no confidence with recent remark", starts here.

New York Times, 10/18/2021

Foxconn’s chairman, Young Liu, expressed confidence that a company best known for assembling smartphones and laptops had a role to play in the car industry.

“Our biggest challenge is we don’t know how to make cars,” Mr. Liu told reporters on Monday.

10/18/2021 update, "Dear residents, be careful what you wish for", starts here.

Screenshot by driveby video by Retiring Guy

Milwaukee Journal Sentinel, 10/16/2021

Shortly after Foxconn appeared, your Cleveland Business Journal made a list of the deal’s pros and cons -- four of each. That’s how we were in the beginning too. Very balanced. We wanted so much to believe.

We’ve been at the Foxconn party since May 2017 -- and I can assure you, the hangover isn’t worth it. Promises just keep evaporating.

Foxconn has a contract with our local officials to create 13,000 jobs and invest about $10 billion in a large LCD screen manufacturing facility by the end of 2025. But it has virtually no production here and told the state in April it plans to create just 1,454 jobs and invest just $672 million.

Foxconn executives have come and gone. It never felt serious.

What is serious however, is the pickle Foxconn has put the locals in. The Village of Mount Pleasant and Racine County forced hundreds of people from their homes and issued about $400 million of bonds; four years later we’ve got a 4,000-acre industrial park that contains just five buildings, none with much activity. [emphasis added]

10/7/2021 update, "The reviews are in, and the dramedy gets hammered on Wall Street", starts here.

Observer, 10/5/2021

However, Wall Street isn’t pleased with the price Lordstown has negotiated for the former GM plant—or the general prospect of Endurance.
The $230 million price tag is less than one fifth of Morgan Stanley’s prior plant value estimate, Jonas wrote in a note to clients on Monday.
“We had previously assumed the Endurance project would be cancelled as we do not see a path to commercial viability at any appreciable scale,” he added. “[Endurance] likely exposes the company to the risk of further elevated cash burn and liquidity risks even in a contract manufacturing scenario.”
Still, the Foxconn deal will provide Lordstown with enough cash to navigate its operational issues at least in the short term.

Acccording to Merriam-Webster, the first-known of 'dramedy' occurred in 1978. Other coinages from the same year include:

enterprise zone
giveback
information technnology
panic disorder
Stockholm syndrome

10/8/2021 update, "Don't hold your breath, Ohio. The road ahead is likely to be littered with broken promises", starts here.

Headline from WKSU, 10/5/2021

Recommended reading for Lordstown residents

Mahoning Matters, 10/5/2021

No politicians showed up at the Lordstown plant for a big ceremony with executives — a key difference from the announcement in Wisconsin.

Willy Shih, an international trade and manufacturing expert at Harvard Business School, said such announcements in China are known as “state visit projects,” where high-ranking officials make grand pronouncements for economic plans. In China, it’s understood the plans may change radically based on economic realities, whereas in the U.S. the public expects a company to follow through with the announcement. [emphasis added]

"Something else"?

Original 4/13/2020 post starts here.