GM declines land option at ex-plant
LORDSTOWN — General Motors has declined an option to lease back space at its former automaking plant, but has an agreement with the facility’s new owner for some access to the property so GM can build its battery-cell plant next door.
Part of the deal with Lordstown Motors Corp. when it bought the sprawling facility in November were options for GM to lease back 400,000 square feet of land and 500,000 square feet of real property.
The automaker decided to let those options lapse and instead worked out a temporary access agreement with Lordstown Motors as GM constructs its more than $2 billion next-gen plant that will manufacture cells for electric vehicle battery packs.
“GM let the options expire without exercising them because these were no longer desired,” GM spokesman Dan Flores said. “GM has instead entered into an access agreement with LMC, allowing GM to temporarily use some of their overflow vehicle shipping lot for construction staging as we begin site work at the adjacent battery cell manufacturing plant site.”
The new plant is on 158 acres on Tod Avenue immediately adjacent to the 6.2 million-square-foot automaking facility. Grading and clearing at the site began earlier this month.
Construction is expected to begin by July and wrap in January 2022.
The lease options were contained in paperwork filed in December regarding an open-end mortgage agreement that let Lordstown Motors borrow up to $40 million from GM. The deal was designed that way to let Lordstown Motors take possession of the plant and begin repurposing it to launch its electric pickup truck while still raising money to begin operating.
Lordstown Motors plans to launch the battery-powered Endurance in January, one month behind what the automaker had planned. The delay is because of the coronavirus pandemic.
The truck will be revealed publicly this summer, likely during a virtual event from the plant.
GM’s facility figures to play a huge role in the automaker’s all-electric future with cells made at the plant used in packs that will power 11 of 13 vehicles GM plans for in the next five years. Those cells also will be used in packs in two new electric vehicles GM and Honda are developing jointly for the Japanese automaker.
The plant, a joint venture with South Korea’s LG Chem, will employ upward of 1,100 people.
GM has a third option in the agreement with Lordstown Motors to buy back the facility and other transferred assets. That option expires at the end of May, and it’s unlikely GM will exercise it.