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Lordstown Motors: Electric truck startup warns it may go out of business
 [MSN] Lordstown Motors, the startup electric truck maker, warned Tuesday it is close to running out of cash and may be forced out of business in the next year.The news, which sent Lordstown shares down about 20% in midday trading Wednesday, is a blow to not only the company but also to the gritty industrial town from which it gets its name. For 53 years, Lordstown, Ohio, was home to a massive General Motors plant, which GM closed in 2019. The car giant sold the 6.2 million square foot factory, nearly twice the size of the Pentagon, later that year to start-up Lordstown Motors, which promised to pay union-level wages to workers to build its Endurance pickup truck. It is due to start production of that truck in September. Lordstown currently has about 600 employees. But Tuesday the startup said it no longer has enough money to start commercial production. It warned there is now "substantial doubt" about its ability to stay in business over the course of the next 12 months. The company filing said it had $259.7 million in cash on hand as of March 31, after posting a net loss of $125.2 million over the previous three months. It said it's ability to stay in business "is dependent on its ability to complete the development of its electric vehicles, obtain regulatory approval, begin commercial scale production and launch the sale of such vehicles." It is seeking additional financing. Sounds like either fraud or managerial incompetence. They should have known what their burn rate was going to be before they started. Related: Electric truck: 2021-02-24 Oshkosh Selected for Massive $6 Billion Post Office Vehicle Contract Electric truck: 2020-12-13 Oracle moves headquarters from Silicon Valley to Austin Electric truck: 2020-09-10 'Couldn't dream of a better partnership': GM set to produce electric trucks by Tesla competitor Related: General Motors: 2021-04-08 War On Cash: The Next Phase Begins by Jim Rickards General Motors: 2021-02-11 General Motors records $6.4 billion profit in 2020 amid pandemic General Motors: 2020-09-10 'Couldn't dream of a better partnership': GM set to produce electric trucks by Tesla competitor Related: Start-up: 2021-06-05 Propaganda aside, Israel is thriving as never before Start-up: 2021-06-04 Another Nigerian Busted in U.S. for Stealing $800,000 in Payroll Hacking Start-up: 2021-05-23 California nightmare: How high taxes, rampant crime, suffocating wokery, streets littered with homeless addicts, and years of liberal policies are blamed for ruining the Golden State... as thousands of families flee to Republican Texas and Florida Posted by: Fred 2021-06-11 |
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