by WorldTribune Staff / 247 Real News June 28, 2023
A manufacturer of electric vehicles which received millions in U.S. taxpayer funds via grants and tax breaks has filed for bankruptcy.
Ohio-based Lordstown Motors Corp. (LMC) announced on Tuesday that it was filing for Chapter 11 bankruptcy. Inside EVs reported last week that the ex-CEO and founder of LMC, Stephen Burns, sold all of his remaining stock in the EV startup in three separate transactions between May and June.
LMC had received $4.5 million from JobsOhio, a private nonprofit that collects funds through a government-mandated monopoly on spirituous liquor sales, according to Cleveland.com. The company also received $20 million in tax credits to be paid out over 15 years by the Ohio Tax Credit Authority, according to Business Journal Daily.
LMC also received a $40 million loan from General Motors, the previous owner of the manufacturing plant in Lordstown. General Motors had received $60 million in subsidies from the state of Ohio, but returned only $28 million of it after a settlement was reached due to the stipulation that the plant was supposed to be open until 2039, The Daily Caller reported.
In 2009, the plant in Lordstown, Ohio received $60 million from the state to build fuel-efficient and inexpensive cars. At that time, it was under the ownership of GM, but it was shut down in 2019 and sold by GM to LMC.
In 2021, multinational electronics manufacturer Foxconn announced it was investing $170 million in LMC to build and fund the plant, which LMC alleges was not fully delivered, according to a press release from LMC, prompting the filing of Chapter 11 bankruptcy and a suit being filed against Foxconn.
“Despite our best efforts and earnest commitment to the partnership, Foxconn willfully and repeatedly failed to execute on the agreed-upon strategy, leaving us with Chapter 11 as the only viable option to maximize the value of Lordstown’s assets for the benefit of our stakeholders,” LMC CEO and President Edward Hightower said, according to the press release.
Foxconn has denied the allegations.
Meanwhile, Ford Motor Co. said it plans to lay off at least 1,000 employees less than a week after receiving a $9.2 billion loan from the Biden administration to invest in three electric vehicle factories in the southern U.S., the Wall Street Journal reported on Tuesday.
Team Biden is pushing for 50% of all vehicle sales by 2030 to be zero-emission vehicles.