Recent short seller’s report Hindenburg Research has caused a lot of unfavorable attention to Lordstown Motors recently, with the SEC asking the company for information. Despite all this, the Wall Street Journal reports that some residents of Lordstown, Ohio and the surrounding area still believe the company will survive.
Some people are cautious. They still think Lordstown will make it, but they want the company to actually produce something first – people like former GM employee Brian Milo:
“People are optimistic, but it is reserved optimism. It’s like, ‘We support this, we want it to work, but show me first. Prove it. “
The Journal also says that the surrounding area is being appropriately dubbed the “Vale da Voltagem”. Together with the Lordstown Motors plant, GM partnered with LG Chem to build a $ 2 billion battery nearby. GM says it will create at least 1,100 new jobs.
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Lordstown Motors promised even more jobs. CEO Steve Burns told the Journal that the company would eventually have 4,000 workers, with more than 400 initially. That was in January 2019. Earlier this year, there were only 171 people working in Ohio. This does not include the 131 engineers at its technology center in Detroit.
City officials are even more cautious about Lordstown Motors. Understandably, given the blow the city suffered when GM closed the factory. How small the city is – Lordstown is actually a village with just over 3,200 inhabitants. The economic impact of closing the plant was strong. Mayor Arno Hill estimates the annual income tax loss at $ 1 million per shift:
Arno Hill, the mayor of Lordstown, said the village suffered about $ 1 million a year from lost income taxes for each of the three shifts dismissed, as GM ended the plant’s operations from the beginning. 2017.
Considering how tight the city’s finances are, this affected everything, from filling vacancies in the city to the frequency with which the city buys vehicles from the fleet. Mayor Hill, however, is taking a smart approach to Lordstown. While some small towns would be all-in for a startup in their economically difficult city, Hill wants to see the results before anything:
“At the moment, I’m just waiting to see. You cannot have all your eggs in one basket. Lordstown’s future does not depend on Lordstown Motors. “
The local UAW is hopeful that the company will do well, with the chapter president hoping that the company will do well enough for the UAW to organize them. That is if the factory goes into operation. Whatever the outcome with Lordstown, whether some like it or not, it will have lasting effects on the local economy. I just hope it doesn’t harm people and their livelihoods.