Lordstown Motors is seeking a new chief executive officer (CEO) and chief financial officer (CFO). The company hopes to build an electric pickup truck called Endurance in the small town of Lordstown, Ohio, starting in September. But a part of allegedly reliable pre-orders turned out to be an air number. On Monday, company founder and CEO Steve Burns, his daughter and head of marketing Brittney, and his CFO Julio Rodriguez had to take their hats.
Mr. Burns also has to vacate his seat on the board of directors, but is compensated with 750.000 US dollars. His post will be taken over temporarily by Angela Strand, the acting chairwoman of the board of directors. Mr. Rodriguez still gets 200.000 dollars plus stock options. For the time being, Becky Roof will take over his financial tasks. She is a manager at AlixPartners, a consulting firm specializing in rescuing unstable companies.
And rescue is what Lordstown Motors needs: the pickup startup is in a serious crisis. "The company believes that its current cash resources are not sufficient to finance the production in staggered numbers and the market appearance of such vehicles. These conditions raise substantial doubts about our (continued) existence for at least a year", is stated in the most recent quarterly report, filed late.
Lordstown Motors plans to continue
The previously proudly presented pre-orders of alleged fleet operators do not deliver what they promise. An investigative committee of the Lordstown Board of Directors found that one alleged coarse customer lacked the necessary change, while other orders came not from fleet operators but from fleet managers or "Influencers" who actually wanted to offer the e-vehicles to third parties. However, the investigative committee denies or portrays as immaterial other allegations of a short-seller, including the burning of a prototype.
New management put on a good face Tuesday: Operations continue as normal. Even though pre-orders were not reliable, there were interested customers. Production of electric pickups is scheduled to begin in September, as previously planned. The 2,200 vehicles planned for this year.200 vehicles planned for this year, but at most half that number.
An electric camper van based on the Endurance, which was also planned, has been put on the back burner. Next week, financial analysts, journalists and investors in Lordstown are expected to get a glimpse of progress at the factory. On the stock market, the euphoria has faded: The share price is at a third of its 52-week high.