LORDSTOWN, Ohio (WKBN) – Lordstown Motors announced Wednesday that they have entered into a “definitive asset agreement” and partnership with Foxconn.
The two companies have agreed to work jointly on Lordstown Motors’ electric vehicle programs in the production and assembly plant in Lordstown.
The deal contains the following details:
- LMC has agreed to sell to Foxconn the Lordstown facility, excluding certain assets such as the hub motor assembly line and battery module and pack lines, for $230 million.
- Foxconn has agreed to make a down payment of the purchase price of $100 million by November 18, and subsequent down payments of $50 million on each of February 1, 2022 and no later than April 15, 2022. The balance of the purchase price will be paid at closing.
- The parties have agreed to pursue a contract manufacturing agreement for the Endurance pickup truck, which must be entered into before closing—currently targeted by April 30, 2022.
- Lordstown Motors and Foxconn will pursue a joint venture agreement to co-design and develop vehicle programs for the global commercial fleet market, using the MIH open platform. Lordstown and Foxconn would have the right to commercialize these new EV programs in North America and internationally.
- Upon the closing, Foxconn will receive 1.7 million warrants to acquire Lordstown common stock, exercisable for three years, at a price of $10.50 per share.
Closing of the deal is subject to closing conditions, including entry into the contract manufacturing agreement, regulatory approvals and other customary closing conditions.
Also on Wednesday, Lordstown Motors announced several executive appointments and released an update on its deal with Foxconn as it works to bring the Endurance pickup truck to market and after a new deal with Foxconn Technologies.
The change in leadership comes as Rich Schmidt stepped down as president of Lordstown Motors and CFO Julio Rodriguez resigned after LMC admitted trouble with its pre-orders and then said it was running low on cash for operations.
Adam Kroll, an investment banker with a focus on the automotive industry, is the new company’s chief financial officer.
The company says the appointments are designed to strengthen its engineering capabilities for future vehicle development.
Edward T. Hightower, a veteran automotive executive, has been appointed president of Lordstown, effective November 29.
Hightower has 30 years of experience serving in product development, engineering, manufacturing, commercial and senior executive roles between Ford, BMW and GM. He currently serves as managing director of Motoring Ventures LLC and has been advising Lordstown in a consulting capacity, according to the company.
Shea Burns has been appointed as senior vice president of operations. In this role, Shea will continue to support Endurance launch readiness as well as the implementation of the previously announced agreement in principle with Foxconn as a consultant.
Burns has over 25 years of experience in the automotive industry, including having previously served as vehicle launch leader at Ford Motor Company and senior director of quality and director of engineering operations at Meritor, according to Lordstown Motors.
Jane Ritson-Parsons, who has been serving as the chief operating officer, has been appointed to the newly-created position of executive vice president—chief commercial officer. In this role, Ritson-Parsons will be building out Lordstown’s commercial strategy and continue overseeing several corporate functions including sales, customer service and support, human resources, brand marketing and communications.
“I am excited to welcome Edward Hightower and Shea Burns to these leadership roles with the Lordstown team as we move into this next critical phase,” said Lordstown CEO Dan Ninivaggi. “They both bring deep automotive experience, and with strong backgrounds in engineering, new product development, manufacturing, and launch readiness. These skill sets are especially important as we not only pursue the launch of the Endurance but as we also pursue future vehicle development opportunities with Foxconn. I’d also like to thank Rich Schmidt for his contributions to Lordstown Motors.”