‘Lordstown stood out’

“We are thrilled with the opportunity to build Lordstown Motors into a top-tier electric truck company that is highly differentiated from the competition,” Lordstown Motors CEO Steve Burns said in a prepared statement. “We are uniquely positioned to be a leader in the industry.”

During a morning call with analysts that offered prepared remarks only, with no question and answer session, Diamondpeak CEO David Hamamoto said his team evaluated many investment options, but “Lordstown stood out as a differentiated high-growth company” that has a “transformation product and business plan.”

Also during the call, Burns added that owning GM’S former plant gives Lordstown Motors an edge.

“We have full ownership and control over the production of our vehicles,” Burns told analysts. “Given its location in the Mahoning Valley, that location gives us access to a deep pool of talent including a trained manufacturing workforce.”

GM’S part in the deal

GM has its own electric vehicle strategy underway with the promise to deliver to market at least 20 new electric vehicles by 2023. As part of that strategy, it plans to build batteries at a plant adjacent to the Lordstown Motors assembly plant.

But GM also is investing $75 million in Lordstown Motors, a potential future rival in the electric pickup market. GM’S investment includes $25 million in cash plus non-cash assets (including the plant and equipment).

“GM is excited about the progress LMC has made because we believe production of the Endurance pickup will help create jobs in the Lordstown community,” said said GM spokesman Jim Cain.

The pro forma implied equity value of the combined company is approximately $1.6 billion.

$1.4 billion in preorders

About $675 million of gross proceeds are expected from the transaction. Those will fund production of the Lordstown Endurance all-electric light-duty pickup, due to market next year.

The pickup will deliver the equivalent of 75 miles per gallon and has been engineered and priced for the large commercial fleet market.

“You don’t create need, there is a demand for this,” Burns said. “We will be the first electric work truck, and nobody will have that for years.”

Lordstown Motors unveiled the Endurance in June and has received 27,000 orders, which represents $1.4 billion in potential revenue, mostly from commercial fleet customers, the company said.

Of course there are competitors. Ford Motors is an investor in electric truck maker, Rivian. But the two put their plans on ice to jointly develop a Lincoln-brand electric vehicle in April.

Also, electric automaker Tesla is developing the Cybertruck due to market in 2022.

Access to workers

In May, Burns also told the Free Press that he had big plans for the 6.2-millionsquare-foot facility in Lordstown, that he bought from GM. GM had last built the Chevrolet Cruze compact car there before idling the plant for good early last year as part of a cost-cutting measure.

Burns said he will start hiring 600 workers next year to build the first 20,000 Endurance pickups.

Then, starting in 2022, Burns will hire more people to build other allelectric vehicles, such as SUVS and a midsize pickup.

“We didn’t buy a mass volume plant like this and not plan to fill it up,” Burns said. “This is a gem of a building built for volume manufacturing.”