Build Back Better, Ford Ditches Ohio Plant Plans for Mexico EV Manufacturing
Posted on 03/19/2021
In a sharp turn from Trump’s America First populist agenda, the Biden administration has embraced a more internationalist view on investment, trade, and jobs with Latin America, the Middle East, and China. Immediately upon taking office, U.S. President Joe Biden moved to close the Keystone XL pipeline project, an energy project popular with U.S. labor and energy companies. The leadership of U.S. unions, including the United Auto Workers (UAW) union, supported Biden during the elections and historically sides with Democrats.
In another round of labor news, the UAW union has informed workers at the Avon Lake Ford plant that Ford plans to move a major project slated for 2023 from Northeast Ohio to a plant in Mexico. Ford decided to build its new electric vehicles in Mexico where labor is far cheaper than the U.S. The Mustang Mach-E is produced in Cuautitlan, Mexico. There are currently two additional electric models planned for the Cuautitlan plant, with rumors including two EV crossovers – one Ford and one Lincoln.
In 2019, the UAW claims Ford Motor Company promised to invest US$ 900 million at the Avon Lake plant. This has the potential to leave nearly 2,000 Americans without a job in a time where the COVID-19 pandemic has impacted the U.S. employment rate.
Hope in Lordstown Motors
Embattled Lordstown Motors Corporation is located in Lordstown, Ohio, and is based in the former Lordstown Assembly which previously belonged to General Motors (GM). Shares of electric vehicle start-up Lordstown Motors closed down 13.8% on March 18, 2021 after the company confirmed there is an SEC inquiry. Lordstown Motor could have a similar fate like Nikola Corporation, an EV “trucking” company. Trevor Milton resigned from Nikola.
Hindenburg Research wrote a scathing research paper claiming Lordstown Motors of using “fake” orders to raise capital for its first product, an all-electric pickup truck. Hindenburg Research believes that thousands of Lordstown’s claimed orders were non-binding, no-deposit indications of interest by companies without the apparent financial strength to support the size of the orders.
“We never said we had orders. We don’t have a product yet so by definition you can’t have orders,” Lordstown Motors CEO Steve Burns told CNBC Squawk Box. “I don’t think anybody thought we had actual orders. That’s just not the nature of this business.”
Steve Burns, the former CEO of Workhorse Group, founded Lordstown Motors in 2018. GM loaned Lordstown Motors US$ 40 million in order to underwrite a substantial part of the plant purchase. GM has invested US$ 75 million in Lordstown Motors. In March 2020, Lordstown Motors paid Workhorse Group US$ 12 million for the licensing rights to the intellectual property of the Workhorse W-15 pickup truck. In October 2020, Lordstown Motors reverse merged with a special-purpose acquisition company (SPAC) named DiamondPeak Holdings (NASDAQ:DPHC).
