Lordstown Motors, the troubled electric truck company that bought a shuttered General Motors factory in Ohio, filed for bankruptcy Tuesday.
Once hailed by former President Donald J. Trump for preserving manufacturing jobs, the company struggled with a series of development setbacks and frequent management changes, never managing to build or sell many trucks.
The Chapter 11 bankruptcy filing was sparked by a dispute with a major investor, Foxconn, the Taiwan-based contract manufacturer. Foxconn said Lordstown had breached its investment agreement because its shares had fallen below $1 a share. Lordstown said on Tuesday that it filed a lawsuit alleging that Foxconn reneged on its agreement to invest more money in the company.
Lordstown was founded in 2018 by Steve Burns, a former CEO of another electric vehicle company called Workhorse Group. The company bought a former GM plant in Lordstown, Ohio, which had produced the Chevrolet Cruze sedan. Mr. Trump promoted the deal on Twitter even before a deal was signed.
Lordstown hoped to produce an innovative truck that used electric motors in each of the wheel hubs, but had difficulty turning his idea into a vehicle that he could mass-produce. Even at its peak, the company employed a fraction of the employees who ever produced cars for GM in Lordstown, which sits between Cleveland and Pittsburgh.
In 2021, Lordstown Motors sold its factory to Foxconn, which is best known for assembling Apple iPhones at sprawling factory campuses in China.
Lordstown shares were down more than 50 percent in early trading Tuesday, to around $1.20. They were trading at around $400, adjusted for a recent stock split, in early 2021, when investors were incredibly bullish on the prospects for electric vehicle startups. Lordstown listed its shares on the Nasdaq stock exchange in October 2020 by merging with a special purpose acquisition company called DiamondPeak Holdings.
This is a developing story. Please check back for updates.