By on January 30, 2020

Lordstown Motors

No, General Motors hasn’t snatched back its mothballed Lordstown, Ohio assembly plant and restarted production of the Chevrolet Cruze. Clearly, those angry letters from yours truly fell on deaf ears.

Instead, the plant’s new owner, Lordstown Motors, will reveal the model it hopes to build at the former GM site at this summer’s Detroit auto show. Before homegrown electric pickups can roll out of the plant, however, Lordstown first needs cash.

That’s where the feds come in.

As reported by Reuters Wednesday, the fledgling automaker is pursuing a $200 million loan from the U.S. Energy Department to cover retooling costs.

That tidbit comes straight from Lordstown Motors CEO Steve Burns, who met with Energy Secretary Dan Brouillette earlier this week. The bag of cash Burns hopes to tap — the Advanced Technology Vehicles Manufacturing program — hasn’t doled out funds since 2011.

“We think we are worthy of government help. We don’t want a handout — we want a loan,” Burns said. “It’s just going to be more jobs faster if we get it. We are viable without it.”

The vehicle Lordstown aims to build is an EV pickup called Endurance; the automaker expects to have a drivable example on hand when the North American International Auto Show kicks off in early June. Lordstown is just one automaker seeking to fill the still-hazy demand for an emissions-free truck, and competition is fierce. Ford aims to launch its electric F-150 by the end of next year; GM has countered with the GMC Hummer EV teased this morning. Not to be outdone, Tesla has its own upcoming EV-with-a-bed.

Meanwhile, Michigan-based Rivian, now flush with Amazon and Ford cash, expects to start production of its R1T pickup before the end of the year. Lordstown Motors is no Rivian — it’s starting almost from scratch.

That said, the startup has high hopes to turn the shuttered GM plant, which it bought late last year for $20 million, into a going concern.

“It’s cool to bring something back to life,” said Burns, who added that the Energy Department loan isn’t the only source of funding available to the automaker. Additional investment is being sought, and Lordstown is currently in “advanced talks” with a large investor, the CEO stated.

[Image: Lordstown Motors]

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12 Comments on “Fresh Lordstown Product Bound for Detroit...”


  • avatar
    EGSE

    “We don’t want a handout — we want a loan”

    If they’re looking for a lower interest rate or more favorable lending requirements than private lenders will give them, then the difference in rates/terms is a “handout”. Absent compelling benefits to the taxpayer as reasons to extend them a government loan, they should be turned down.

    • 0 avatar
      highdesertcat

      ” they should be turned down.”

      Indeed!

      GM still owes the US taxpayers more than $11BILLION plus interest from the last handouts, bailouts and nationalization scam perpetrated on US taxpayers and others in 2009.

      As I commented before over the years, it doesn’t matter who is in the White House or which political party runs each chamber of Congress, this is one bi-partisan collusion to selectively keep certain US companies alive, at any cost.

      And President Trump will see to it that GM and the UAW will be fully funded again, at taxpayer expense.

      • 0 avatar
        FreedMike

        Well, yeah, the idea is to keep these companies alive. Why? Because it will cost the government and taxpayers more to watch them go broke. All the costs associated with “standing on principle” and watching GM get liquidated (which was the only outcome, folks) – lost tax revenues alone from the company, its’ dealers, and the overwhelming majority of all the folks working for said entities, would have been FAR more than eleven billion over the last 10 years. And we’re not even talking about stuff like unemployment, bailing out pensions, putting the folks who couldn’t find anything else on assistance, and so on.

        It’s business – that simple. Eleven billion? We got off cheap. Get over it.

        • 0 avatar
          highdesertcat

          FreedMike “Get over it.”

          The real-world buyers aren’t getting over it which is one reason why GM trucks are now falling behind RAM in sales.

          Never underestimate or minimize the power of the purse. Buyers have deserted GM in droves.

          • 0 avatar
            HotPotato

            Don’t be naive. The engineered sale of Chrysler to a foreign company (neither American nor Italian but technically Dutch, the better to dodge taxes on two continents) was also arranged by Uncle Sam for the purpose of avoiding job loss, and Uncle Sam had bailed out Chrysler before too. Every one of the Detroit Three has been bailed out one way or another, and it’s a good thing, too, because the alternative would be a pandemic of shuttered parts suppliers that harmed all US-based auto production, US or foreign owned alike.

  • avatar
    cprescott

    They should pay the going rate. And let’s end any buying subsidies for alternative powered vehicles. If you want an electric or hybrid vehicle, you should pay the entire cost and should not stiff your neighbor who doesn’t have one to pay for the subsidy you got.

  • avatar
    redapple

    They got their hand out; from GM. A near free massive plant.
    (and radical area workers (see toilet door strike and many others)

  • avatar
    FreedMike

    Assuming the loans get paid off, what’s the REAL cost here? It’d be the difference between the interest the government could have made at a market rate, versus the lower rate it actually charged. What are we talking here – a few million? If the company takes off, that’s a pittance compared to what the government could make on tax revenues from the entity, all of its’ employees, all of its’ dealers and their employees, all of of its’ suppliers, and so on. It’s a business proposition, and that’s all it is. The only difference is that the government’s business model isn’t the same.

    The question isn’t whether the government should be doing this – it should. The REAL question is whether the government stands to make money on it. And that depends on whether this company will succeed or not. That’s what we should really be talking about, isn’t it?

    • 0 avatar
      EGSE

      Nothing in the article suggests the company can’t find money in the private sector; in fact it’s stated that they’re in “advanced talks” with a private investor. They’re looking to find the cheapest money which is their fiduciary responsibility to do, but so far this is not a “lender of last resort” scenario.

      If they succeed as a company the benefits you listed will materialize. If not, multiple, better positioned competitors like Rivian and Tesla will fill that niche and those bennies will still happen. This is nothing like the GM rescue; there is no looming threat to the economy from a bankruptcy.

      And if that fund has been dormant since 2011, how necessary is it to the health of our economy? It should have had a sunset clause.

  • avatar
    dukeisduke

    Rent seekers. Yeah, they’re looking for a handout.

  • avatar
    aja8888

    Private loans? There is no collateral to put up. That’s why they are going to the government (aka, taxpayer money).

  • avatar
    HotPotato

    This whole arrangement is weird. They’re Workhorse, but they’re not Workhorse? They’re GM-adjacent, but not GM? Seems to me they set up in this location thinking Trump would see an irresistible opportunity throw money at them in order to grab credit as they guy who got GM’s shuttered heartland factory back to work. And the independent structure is to protect the corporate relatives in case of failure. But what the hell do I know; it’s hard to see what’s in that black box.

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