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LORDSTOWN -- While they wish the best for Lordstown Motors Corp. as it goes through bankruptcy and is put up for sale, local officials say they are focused on future success of Foxconn at the former General Motors complex.
The two companies have had issues for months resulting in Lordstown Motors declaring Chapter 11 bankruptcy Tuesday and suing Foxconn.
"Foxconn is viable, while I hope Lordstown Motors is viable," said Lordstown Mayor Arno Hill. "I'm hoping for the best for Lordstown Motors, but they've had speed bumps in the road. The plant will be viable under Foxconn. The plant will be fine and down the road, they'll be prosperous."
Guy Coviello, president and CEO of Youngstown / Warren Regional Chamber, said: "We are very much in support of what Foxconn has in store for the facility and will continue to support Foxconn's efforts. I don't think the long-term use of the facility, which is robust, will be impacted by this announcement."
TROUBLES
Foxconn, a technology and electronics giant, purchased the sprawling former GM site for $230 million on Sept. 30, 2021, from Lordstown Motors, a startup electric truck company formed in 2018, in exchange for financial and operational support.
In addition to filing bankruptcy this week, Lordstown Motors filed a lawsuit against Hon Hai Technology Group and its affiliates, including Foxconn, claiming fraud and bad faith, leading to the bankruptcy.
Lordstown Motors and Foxconn announced an equity investment agreement Nov. 7, 2022. A large portion of the $170 million was for development and design of a new EV program.
Foxconn said in April that Lordstown Motors breached the investment agreement when the latter was delisted by Nasdaq because its stock had fallen below the minimum $1 per share for 30 consecutive trading days. Lordstown Motors did a stock split May 25 with Nasdaq later telling the company it was back in compliance.
Foxconn then told Lordstown Motors it wouldn't close on a $47.3 million stock purchase because of the breach.
Earlier this month, Lordstown Motors threatened to sue Foxconn if it didn't make good on the $170 million investment as well as on the $47.3 million stock dispute. Lordstown Motors followed through Tuesday.
In response to the lawsuit and bankruptcy, Foxconn said Lordstown Motors repeatedly attempted to mislead the public and Foxconn tried to help financially, but a resolution couldn't be reached.
WITH OR WITHOUT
Coviello said: "I'm very comfortable that a company with the wherewithal of Foxconn is going to make abundant use of that facility with or without Lordstown Motors."
Hill said he hoped Lordstown Motors could successfully sell the company.
"They're at loggerheads," he said. "I'm going to wait and see."
State Rep. Nick Santucci, R-Howland, said: "I worked with Lordstown Motors while (working) at the regional chamber and wanted to see them thrive in Trumbull County. It's never a good day to see a local business declare bankruptcy, but I'm hopeful their issues can be resolved and we can see the plant up and running again in the future, whether that's with LMC or another manufacturer."
He added: "The Lordstown plant remains key to the Valley's economic future and has so much potential. I will continue to do whatever I can to help bring jobs back to our region."
State Rep. Lauren McNally, D-Youngstown, said a lot of the Mahoning Valley's economic future is "tied up with the anticipated growth of Lordstown. I have concerns. I feel there was a lot of hope and a lot of confidence from a lot of different entities going into the Foxconn deal with Lordstown Motors. We were planning for a long time and to have the rug pulled out from under the plan is what this feels like."
McNally said: "We need to sit back for a second and see what the fallout is going to be not only because of Lordstown, but all of the planning we've done."
State Sen. Sandra O'Brien, R-Lenox, said: "This is a painful experience for everyone involved: employees, stockholders and suppliers. It's so unfortunate. Despite that, there is hope. The company has capital on hand. Hopefully they can find a buyer."