The Lordstown Motors plant is where GM once operated, in Lordstown, Ohio on October 16, 2020.
Megan Jelinger | AFP | Getty Images
General Motors sold its stake in Lordstown Motors during the fourth quarter after an undisclosed lockup period, the Detroit automaker confirmed on Tuesday.
GM held 7.5 million common shares in Lordstown as part of a SPAC deal that took the Ohio-based automaker public in October 2020. The shares had an initial net worth of $75 million. They were donated in exchange for in-kind contributions and $25 million in cash. GM’s stake was less than 5%.
The disclosure comes after Lordstown announced disappointing plans on Monday to produce and sell up to just 3,000 vehicles until next year, including 500 in 2022. Both are well below the amount the former management has sold to investors with a view to public listing.
GM spokesman Jim Cain declined to disclose the exact timing of open market sales or net proceeds, saying the total was not meaningful.
The stock sale was somewhat expected. GM’s involvement in the venture was a goodwill gesture to help get the Lordstown assembly plant back up and running after the automaker ended production there in 2019.
“Our goal in investing was to enable them to complete the purchase of the plant and restart production,” Cain said.
Lordstown recently began producing pre-production models of its first vehicle, an all-electric pickup truck called the Endurance, at the factory. It plans to begin deliveries to customers in the third quarter of this year.
In the fourth quarter, Lordstown announced a deal with iPhone maker Foxconn to buy the factory for $230 million. The deal includes Foxconn, which is officially known as Hon Hai Technology Group, which handles production of the Endurance pickup truck.
The deal is still being finalized, Lordstown executives said on Monday. They are also in negotiations for the two companies to co-develop vehicles in the future. Lordstown CEO Dan Ninivaggi called the deal critical to the company’s future success.