{"id":203674,"date":"2021-06-14T10:03:31","date_gmt":"2021-06-14T14:03:31","guid":{"rendered":"https:\/\/www.thedetroitbureau.com\/?p=203674"},"modified":"2021-06-16T13:46:56","modified_gmt":"2021-06-16T17:46:56","slug":"facing-bleak-prospects-lordstown-motors-ceo-and-cfo-resign","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2021\/06\/facing-bleak-prospects-lordstown-motors-ceo-and-cfo-resign\/","title":{"rendered":"Facing Bleak Prospects, Lordstown Motors CEO and CFO Resign"},"content":{"rendered":"\n

Lordstown Motors Chief Executive Officer Steve Burns has resigned from the struggling electric vehicle startup, as has Chief Financial Officer Julio Rodriguez.<\/p>\n\n\n\n

\"\"
Lordstown Motors CEO Steve Burns resigned amidst a massive cash crunch that threatens the nascent EV maker’s survival.<\/figcaption><\/figure><\/div>\n\n\n\n

The departures come just days after the Ohio-based company warned there was \u201csubstantial doubt\u201d it would have enough money to remain in business<\/a><\/span><\/strong> for the next year. The company also faces an investigation by the U.S. Securities and Exchange Commission into claims that it misled investors.<\/p>\n\n\n\n

Lordstown said Monday Angela Strand, its lead independent director, was appointed to serve as its executive chairwoman. A search will now begin for a permanent replacement for Burns. Separately, Becky Roof was named interim finance chief for the company.<\/p>\n\n\n\n

\u201cWe remain committed to delivering on our production and commercialization objectives, holding ourselves to the highest standards of operation and performance and creating value for shareholders,\u201d Strand said in a statement. \u201cAlong with the management team, I will continue to work closely with them and the Board to execute on Lordstown\u2019s vision for the future of electrified transportation.\u201d<\/p>\n\n\n\n

Drawing from history to kick off the future<\/h2>\n\n\n\n
\"Lordstown
The new Endurance was supposed begin production at the end of September getting to full speed by the end of the year. That’s in serious doubt now.<\/figcaption><\/figure><\/div>\n\n\n\n

Lordstown is one of numerous new companies targeting the electric vehicle sector. The company draws its name from the Ohio town in which its factory is based. It acquired the plant from General Motors, which once produced small cars like the Chevrolet Cruze there.<\/p>\n\n\n\n

Lordstown\u2019s goal has been to produce an all-electric pickup using novel in-wheel \u201chub\u201d motors. It was emphasizing sales to fleets and, until a few months ago, claimed to have lined up thousands of advance orders for the vehicle, named Endurance.<\/p>\n\n\n\n

It used its claimed success to help pull together financing and a deal to go public as part of a merger with DiamondPeak Holdings, a special purpose acquisition company, or SPAC. At peak, its stock price surged to $31.80 a share. It closed Friday at $11.41.<\/p>\n\n\n\n

Shares dropped in aftermarket trading after word of the resignations was released.<\/p>\n\n\n\n

It all began with a report<\/h2>\n\n\n\n

Things began to crumble in March when the short-seller group, Hindenburg Research released a report<\/a><\/span><\/strong> questioning Lordstown\u2019s optimistic sales projections. According to Hindenburg, the \u201cfake\u201d orders were used to help Lordstown raise capital. It has since come out that most, if not all, of the automaker\u2019s sales claims are questionable<\/a><\/span><\/strong>.<\/p>\n\n\n\n

\"Lordstown
Lordstown is engaged in beta testing its production line with the first of 57 pre-production models to come soon.<\/figcaption><\/figure><\/div>\n\n\n\n

The SEC probe was announced shortly after the study was released. TheDetroitBureau.com has spoken to several of the companies Lordstown claimed were placing orders. It was told by several that they were, in fact, planning to purchase some Endurance pickups but had not yet finalized plans.<\/p>\n\n\n\n

Lordstown has repeatedly said it plans to begin production of the Endurance this year \u2014 though Hindenburg\u2019s report alleged that this wouldn\u2019t happen for at least several years. What seems clear now is that the company doesn\u2019t have the money to follow through.<\/p>\n\n\n\n

\u201cOur ability to continue as a going concern is dependent on our ability to complete the development of our electric vehicles, obtain regulatory approval, begin commercial scale production and launch the sale of such vehicles,\u201d it said in a 10Q filing with the SEC last week.<\/p>\n\n\n\n

This is the second automotive startup that the short-seller has targeted during the last year. It initially took aim at Nikola Motors<\/a><\/span><\/strong>, an Arizona-based company planning to bring hydrogen-powered trucks to market. After alleging he misled investors, Nikola\u2019s chairman and founder Trevor Milton also resigned.<\/p>\n\n\n\n

Despite the management shakeup, Lordstown said it still plans to participate in a presentation to the Detroit Automotive Press Association this week, as well as meeting of investors at its Ohio plant next week.<\/p>\n","protected":false},"excerpt":{"rendered":"

Much-maligned CEO Steve Burns resigned from nascent EV maker Lordstown Motors. Running short on cash and in the midst of an investigation of the U.S. Securities and Exchange Commission, Burns was joined in his departure by CFO Julio Rodriguez. Find out what’s next at TheDetroitBureau.com.<\/p>\n","protected":false},"author":2,"featured_media":161355,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[7,5,10,9],"tags":[395,1030,738,952,954,344],"make":[],"post-state":[335],"category_old":[],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/203674"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=203674"}],"version-history":[{"count":8,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/203674\/revisions"}],"predecessor-version":[{"id":203803,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/203674\/revisions\/203803"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/161355"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=203674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=203674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=203674"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=203674"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=203674"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=203674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}