Foxconn buys Ohio auto manufacturing plant for $ 230 million
Foxconn Technology Group is moving forward with plans to build electric vehicles in North America, but instead of Wisconsin, they could be made in Lordstown, Ohio, according to an announcement Thursday.
“After months of careful evaluation, Foxconn will work to acquire pre-existing manufacturing operations in Lordstown, Ohio for the initial production of electric vehicles for our customers and partners,” Foxconn said in a statement.
The impact of this agreement on Foxconn’s operations at its Racine County facility is unclear.
Foxconn has an agreement with Fisker Inc., a California-based electric car company, and now plans to build the Fisker and Lordstown electric vehicles in Ohio, according to the announcement.
The talks between Foxconn and Lordstown were first reported by Bloomberg.
Thursday’s announcement revealed that Foxconn would work with Lordstown Motors to buy the Lordstown plant – excluding its assembly line and certain other assets – for $ 230 million.
If the two sides come to a formal agreement, Foxconn would manufacture Lordstown Motors’ full-size Endurance pickup truck at its Lordstown factory. Lordstown Motors would also agree to provide Foxconn with certain rights regarding future vehicle programs.
Subject to a deal being struck, on the third anniversary of the deal, Foxconn could buy 1.7 million shares of Lordstown Motors at $ 10.50 per share, which is roughly $ 17.85 million.
Once the two parties come to a final agreement, Lordstown Motors plans to enter into a long-term lease for part of the Ohio facility and Foxconn would offer employment to the agreed Lordstown operations and manufacturing employees. .
“We are excited about the prospect of joining forces with a world-class smart manufacturer like Foxconn and believe this relationship would bring operational, technological and supply chain benefits to our business, accelerate overall production of scale vehicles and would increase employment at the Lordstown plant, ”Daniel Ninivaggi, CEO of Lordstown Motors Corp., said in a statement.
“The partnership would allow Lordstown Motors to take advantage of Foxconn’s extensive manufacturing expertise and profitable supply chain, while freeing up Lordstown Motors to focus on bringing Endurance to market, developing offerings of services for our fleet customers and the design and development of new innovative vehicles. models.”
Foxconn said Lordstown’s infrastructure and employee base could allow the company to start producing products by 2023.
Foxconn, which operates a campus in Mount Pleasant, said its properties in Wisconsin would help their push into the electric vehicle market.
“While initial electric vehicle production takes place in Lordstown, Foxconn’s Wisconsin assets will continue to serve as a potential location for additional investment for the growth of Foxconn’s electric vehicles in the United States and will continue to be there. ‘location of data infrastructure and information and communication technology equipment. production, ”the statement read. “Foxconn is also grateful to its partners who helped welcome representatives from Fiskers and Fisker Inc. during their visit to Wisconsin in early summer 2021.”
Fisker was in discussions with Wisconsin Economic Development Corp. During months on the possibility of bringing their electric vehicle design to the state, but no agreement was reached. Fisker named his electric vehicle development project PEAR.
Henrik Fisker, chairman and CEO of Fisker Inc., praised the Ohio deal in a statement.
“Achieving key program objectives such as time to market, access to a well-developed supplier ecosystem, and overall cost targets were all important factors in the decision to locate manufacturing in the industry. ‘Ohio,’ Fisker said. “Since signing the agreement with Foxconn earlier this year, we have worked together intensively on all aspects of the PEAR project, including design, engineering, supply chain and manufacturing. signing of this agreement. “