Lordstown Motors to promote Ohio plant to Foxconn for $230 million

Lordstown Motors has reached a fundamental agreement to sell its giant Ohio assembly plant to iPhone maker Foxconn for $ 230 million, the companies said late Thursday.

Under the agreement, the Taiwan-based electronics contract manufacturer will assemble Lordstown Motors’ first product, an all-electric pickup truck called Endurance, which the company plans to manufacture and sell starting next year.

Sale of the facility to Foxconn, also known as Hon Hai Technology Group, will provide capital for the start-up of electric vehicles and at the same time give Foxconn a start-up aid for the production of electric vehicles. Foxconn also has a deal with a start-up Fisker Produce electric cars in the next few years.

“The partnership would allow Lordstown Motors to benefit from Foxconn’s extensive manufacturing expertise and cost-effective supply chain, while Lordstown Motors can focus on bringing the endurance to market, developing service offerings for our fleet customers and developing innovative new models,” said Lordstown- CEO Daniel Ninivaggi in a statement.

Bloomberg reported first Companies were “close to an agreement” earlier in the day, adding up to 21% in Lordstown stock Thursday before pulling back and closing at $ 7.98, up 8.4%. In after-hours trading, the share gained a further 7.4%.

As part of the proposed transaction, Foxconn will also acquire approximately $ 50 million in Lordstown common stock. The EV start-up then plans to rent part of the former lease on a long-term basis General Motors and Foxconn will provide jobs to Lordstown’s operations and manufacturing staff.

“In addition to achieving our goal of advancing our schedule of building electric vehicle manufacturing capacity in North America, it also reflects Foxconn’s flexibility in providing design and manufacturing services to various EV customers,” said Young Liu, chairman of Hon Hai Technology Group in a statement.

Lordstown was running out of money trying to make money Start production of perseverance. The company said in June it would exist “considerable doubts” of its ability to continue production of the Endurance for the next year due to funding issues.

While Taiwan-based electronics contract manufacturer Foxconn is best known for its iPhone production, it is trying to expand its production to include electric vehicles.

Workers install door hinges on the body of a prototype endurance electric pickup truck at the Lordstown Motors assembly plant in Ohio on June 21, 2021.

Michael Wayland / CNBC

The EV start-up bought the 6.2 million square foot facility in Lordstown, Ohio, in 2019 from General Motors, which ceased operations at the facility as part of a restructuring plan. The startup reportedly bought the facility for $ 20 million, a fraction of its total value, and GM has provided the company with both financial and operational support with suppliers.

GM owns 7.5 million Class A common shares of Lordstown. It received the shares in EV company for an equity value of $ 75 million, most of which were in kind and related to the sale of the property.

Aside from its financial troubles, Lordstown has Wil be inspected from the Securities and Exchange Commission and the Department of Justice regarding its initial public offering and potentially false or misleading statements by former management including company founder and ex-CEO Steve Burns.

Burns and his CFO left the SPAC-backed company in June after an internal investigation found “issues related to the accuracy of certain statements” regarding Lordstown’s pre-orders, specifically the seriousness of the orders and who placed them.

In May, short seller Hindenburg Research said the company had misled investors, including using “fake” orders to raise capital for its Endurance electric pickup truck. The short seller also said the pickup was years away from production. Lordstown has kept its plan to start manufacturing the vehicle in September.

Lordstown previously said the internal investigation found that Hindenburg’s report was “fundamentally incorrect and misleading”.

FDA finds poor circumstances at Baltimore plant that ruined J&J doses

The Food and Drug Administration said Wednesday a facility in Baltimore that ruined millions of Johnson & Johnson Covid-19 vaccine doses was unsanitary and unsuitable for making the shots.

The FDA asked Emergent BioSolutions, which operates the facility, to temporarily suspend production of materials for Covid-19 vaccines earlier this month as the U.S. agency initiated an inspection.

“The company has not adequately trained personnel involved in manufacturing operations, quality control sampling, weighing and dispensing, and engineering operations to prevent drug cross-contamination,” FDA investigators wrote in the report.

The eight-day inspection earlier this month revealed a number of alarming quality issues throughout the facility.

In one 13 page reportInspectors wrote that the facility used to manufacture the vaccine “was not kept in a clean and hygienic condition” and was “not of the appropriate size, design and location to facilitate cleaning, maintenance and proper operation “.

FDA inspectors said paint was peeling in multiple places and walls were damaged, which could affect the facility’s “ability to adequately clean and disinfect.” They also found that when handling waste or materials used to make vaccines, employees did not follow standard operating procedures to ensure they were not contaminated.

The facility has not been approved by the FDA to manufacture or distribute Johnson & Johnson’s Covid-19 vaccine, and none of the doses manufactured at this facility have been marketed for use in the United States. Emergent has agreed to cease production of materials until the issues identified by the FDA are resolved, the agency said.

In a statement, J&J said it had “stepped up its oversight of drug manufacturing at the Emergent BioSolutions Bayview facility, including additional controls and personnel, to ensure that the quality standards of our company and the US Food & Drug Administration ( FDA) are complied with. “”

“Johnson & Johnson will exercise its regulatory authority to ensure that all FDA observations are promptly and fully considered,” it said.

Emergent said it is determined to work with the FDA and J&J to resolve the issues.

“While we are never satisfied with defects in our production facilities or processes, these can be corrected and we will take quick action to correct them,” it said in a statement.

Robert Califf, former FDA commissioner under the Obama administration, said that while the problems at the Baltimore plant appear “troubling”, manufacturing issues are emerging and one reason FDA oversight is so important.

“Supply chain and manufacturing are really complicated issues, but that’s why you need an FDA and inspections, and it’s the shared responsibility of the FDA and the companies themselves,” he told CNBC in a telephone interview.

At the beginning of this month the Biden administration appointed J&J to manage the Baltimore facility after US officials learned that Emergent, a contract manufacturer, made vaccines for J&J and J&J AstraZeneca, Ingredients mixed for the two shots. Officials also stopped production of the AstraZeneca vaccine.

The stoppage in the production of new materials is the most recent setback for J&J. Last week the FDA and the Centers for Disease Control and Prevention did advised states to stop temporarily J & J’s use of the vaccine “out of caution” after six women developed a rare but potentially life-threatening bleeding disorder in which one was dead and one in critical condition. A key CDC panel is due to meet on Friday to make a recommendation on how to use the vaccine.

The FDA said Wednesday that its actions at the Baltimore facility had nothing to do with the ongoing evaluation of the coagulation cases.

Ford invests $1 billion in German electrical car plant

GEORGES GOBET | AFP | Getty Images

ford invests 1 billion US dollars in a production facility for electric vehicles in Cologne. The European branch of the automotive giant is committed to going all-in for electric vehicles in the coming years.

In plans announced Wednesday morning, Ford said its entire range of passenger cars in Europe will be “zero emissions, all-electric or plug-in hybrid” by mid-2026, with an “all-electric” offering by 2030.

By investing in Cologne, the company is updating an existing assembly plant and converting it into a facility that focuses on the production of electric vehicles.

“Our announcement today that we will rebuild our plant in Cologne, where we have been operating in Germany for 90 years, is one of the most significant that Ford has made in over a generation,” said Stuart Rowley, President of Ford of Europe Explanation.

“It underscores our commitment to Europe and a modern future, with electric vehicles at the heart of our growth strategy,” added Rowley.

The company also wants its commercial vehicle segment in Europe to be emission-free, plug-in hybrid or fully electric by 2024.

A “transformative” decade

With governments around the world announcing plans to move away from diesel and gasoline vehicles, Ford, along with several other major automakers, is looking to expand its electric offering and challenge companies like Elon Musk’s Tesla.

Jaguar Land Rover announced its Jaguar brand earlier this week would become fully electric by 2025. The company owned by Tata MotorsThe Land Rover segment will introduce six “all-electric variants” over the next five years.

Elsewhere, South Korean automaker The will launch its first dedicated electric vehicle this year while that in Germany Volkswagen Group invests around 35 billion euros in battery electric vehicles and aims to bring around 70 fully electric models onto the market by 2030.

Last month the CEO of Daimler told CNBC that the auto industry was up “in the middle of a transformation.”

“In addition to the things that we know well – to be honest, building the most coveted cars in the world – there are two technological trends on which we are doubling down: electrification and digitization,” Ola K√§llenius told CNBC’s Annette Weisbach.

The Stuttgart-based company has “invested billions in these new technologies,” he added, explaining that they would “drive our path to carbon-free driving.” This decade, he continued, was “transformative”.