Electric truck maker praised by President Trump for saving Ohio town files for bankruptcy | Ohio

Rosetown Motors, US electric truck maker once admired by former president donald trump It filed for bankruptcy protection on Tuesday as the savior of a depressed Ohio town.

The automaker, named after the town where it is headquartered, has filed for Chapter 11 protection in Delaware and put itself up for sale after failing to resolve a dispute over a promised investment from Taiwan. bottom. Foxconn. At the same time, it also took legal action against Foxconn.

The Rosetown plant in northeastern Ohio was formerly a small car plant for GM. GM decided to close in 2018 It was a move that was described by local workers as having been hit in the stomach.

Mr. Trump etc. Ohio Political leaders pressured GM Chief Executive Mary Barra to reverse the decision or find a buyer. GM agreed to sell the plant to a new corporation called Rosetown Motors, founded by the former CEO of an electric truck maker called Workhorse Group.

The company claimed to manufacture 100,000 cars a year Once it was launched, Trump praised the company, saying the field was “booming” after the release.

In a complaint filed in bankruptcy court, Lordstown accused Foxconn of fraud and breaking a series of promises by failing to honor an agreement to invest up to $170 million in an electric car maker. .

Foxconn previously invested about $52.7 million in Lordstown as part of the deal and now owns about 8.4% of the EV maker. Lordstown alleges that Foxconn has been reluctant to buy more of its shares as promised, misleading EV makers about working together on vehicle development plans.

Foxconn, which is officially known as Hon Hai Precision Industry and is best known for assembling Apple’s iPhones, said Rosetown violated its investment agreement when its shares fell below $1 a share.

The Taiwanese company said Tuesday it remained “positive in engaging in constructive negotiations with Rosetown,” while the U.S. company said it was reluctant to fulfill the investment deal according to its terms. The company said it has stopped negotiations with Rosetown and reserves the right to take legal action.

The two filings by Rosetown could spark international business clashes and increase scrutiny of Foxconn’s EV ambitions and partnerships with other automakers, not just Rosetown.

The lawsuit portrays Foxconn as constantly changing goals in working with Rosetown regarding the automaker’s future vehicles, including failing to deliver on its funding promises and exercising orders directed by Foxconn. This included refusal to engage in initiatives they purportedly supported.

The 2018 start-up Rosetown, in a regulatory filing earlier this month, issued a letter that led Rosetown to believe Foxconn was unlikely to make the planned additional investment. He said he had planned to sue Foxconn because he received it from the company.

In its regulatory filings, Rosetown accused Foxconn of engaging in a “malicious pattern” that caused the company “significant and irreparable harm.”

The Company’s flagship product is the Endurance electric pickup truck, which is produced at General Motors’ former light duty vehicle plant in Rosetown for commercial customers such as local governments. Lordstown sold the factory to Foxconn in 2022.

Lordstown suspended Endurance production earlier this year and resumed building trucks at a reduced rate from April onwards after resolving quality issues with suppliers.

If Rosetown doesn’t find a rescuer willing to resume full production of the Endurance, the Ohio plant could be attractive to foreign automakers looking for a quick way to build vehicles in the United States.

Rosetown filed for bankruptcy with plans to find a buyer. The company doesn’t have an initial offer on hand that sets the lowest price at which other suitors can set the highest at auction, called a “chasing bidder” in bankruptcy parlance.

Lordstown Chief Executive Edward Hightower told Reuters that the Endurance business is ahead of other automakers looking to enter the EV market early as the Biden administration’s policy is to move away from petrol cars. said it could be attractive to

Lordstown’s bankruptcy isn’t the first in a string of EV startups to go public during the pandemic-era Spak boom. But Rosetown was challenging the traditional Detroit automaker’s business core of high-margin pickup trucks, and its location made it a high-profile company in its class.

Like several others, including truck maker Nikola, Lordstown, which went public in 2020, has struggled to meet the high expectations of early investors. In 2021, the company’s chief executive and founder, Stephen Burns, resigned after admitting the company had inflated pre-orders for electric trucks.

Report contributed by Reuters

https://www.theguardian.com/us-news/2023/jun/27/lordstown-motors-electric-vehicle-maker-trump-ohio-bankruptcy Electric truck maker praised by President Trump for saving Ohio town files for bankruptcy | Ohio

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