Foxconn Officially Buys Lordstown Assembly
Best known for manufacturing small electronic devices for companies around the world, Foxconn will soon be branching out to assemble automobiles in Ohio. On Wednesday, the Taiwanese Hon Hai Precision Industry Co. (traded as Foxconn) closed on a deal with Lordstown Motors to purchase a 6.2 million-square-foot plant that used to belong to General Motors.
The $230 million deal leaves Foxconn with the facility and 400 Lordstown manufacturing employees it’s supposed to use to assemble the delayed Endurance pickup. Though the long-term plan is to use the plant to become a contract manufacturer akin to Magna Steyr, with an emphasis on all-electric vehicles.
Despite Foxconn taking over production, Lordstown Motors is remain responsible for vehicle development, parts sourcing, testing protocols, regulatory homologation, and sales. Though the arrangement is slightly confusing, the Taiwanese firm plans to invest $100 million in a joint venture to engineer new EVs with Lordstown based on its own “ Mobility-in-Harmony” (MIH) program.
Foxconn calls MIH an “open ecosystem” and has encouraged just about every entity in the automotive sector to work with it in developing a new platform that “provides an environment where all the major functions of an EV such as chassis, batteries, ADAS (Advanced Driver Assistance Systems), cyber security, cloud connectivity, BMS (Battery Management System), and many more can be developed onto.”
Lordstown CEO Dan Ninivaggi explained to Cleveland.com that the deal gives his company scale — something it had been fretting over since Endurance delays began in 2020. By partnering with the world’s largest provider of electronics manufacturing services, the Ohio-based EV startup believes it can ease supply chain issues, save itself some money in the long run, and finally get some vehicles rolling out of the factory.
“The key theme in the entire transaction with Foxconn if it gives us a more flexible and less capital intensive business model,” he said.
Subsequent interviews have shown that Ninivaggi feels confident that Lordstown is in a strong position in every respect but one. However, that’s supposed to be resolved now that help has arrived from overseas — partially anyway.
“We have about 250 engineers, product development people mostly in Farmington Hills [Mich.] and Irvine [Calif.]. We have purchasing, quality, everything but manufacturing,” The CEO told Automotive News.
From AN:
The injection of cash from the deal might not be enough to ensure production of the Endurance begins on schedule this fall, Ninivaggi said. The company is working to raise an additional $150 million so it can keep its planned third-quarter start of limited production.
Lordstown this week reported its first-quarter loss narrowed to $89.6 million from a loss of $125.2 million a year earlier. It had a cash balance of $204 million, compared with $587 million a year earlier. It had received $200 million in down payments for its assets from Foxconn.
Even if Lordstown ends up folding, the facility already has other EV startups on the hook. Fisker is taking deposits for an affordable, high-volume EV it’s calling the Pear and leadership has stated that the model will be built at the facility in Lordstown, Ohio. There’s also been some speculation that Apple may finally move on Project Titan, leveraging its deep ties with Foxconn to finally build an all-electric vehicle that’s allegedly been in development since 2014.
It’s just fortunate that the factory doesn’t have a lot of high windows. Foxconn has unfortunately developed a bit of a reputation for labor violations in China after its highly publicized installation of suicide nets at a Shenzen iPhone factory. Hon Hai Precision Industry Co. has likewise been faulted with withholding payment, ignoring safety training, and employing far more workers than Chinese labor laws allow. This is particularly unsettling due to the limited nature of protections the nation allows for employees and the sustained nature of these accusations. Foxconn and Apple have even been faulted for knowingly benefiting from forced labor (slavery) supported by the Chinese government. But they’re just one of several multinational businesses (including some automakers) carrying that stain on their portfolio at this point.
[Image: General Motors]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Yeah, Fisker. Heh, heh. The well-known truthteller whose design of an Aston Martin tail-light in 1995 led to him claiming he did the whole car. Obsessed with one day being acclaimed as the true genius he fancies himself, you have to award him an A for neverending effort and ability to talk genius-grade investors into handing him bucketloads of free cash. Over on C/D, he's quoted as promising his new Fisker PEAR EV crossover will start at $29,900 for the '25 model year, assembled by FoxConn at Lordstown and made at a rate of "minimum 250,000 a year". Right. That'll leave plenty of floor space to assemble all those other disparate vehicles, the millions of Apple Cores and other assorted flotsam and jetsam. And of course, the cure for any roof-jumping would-be suicides is to build a factory below grade, so that the windows open at ground level.
6.2 million square feet divided by 400 employees means each person has 15,500 square feet of space to spread out in. Is this the first Inherently Socially Distanced manufacturing plant in history?