Although not much detail about the terms of the loan was shared, the transaction will essentially to support Lordstown Motors Corp will basically be a mortgage, Jim Cain, a GM spokesman, said via an email.
Lordstown Motors dreams big
Lordstown Motors Corp had bought the equipment and the half-century-old Ohio factory for $20 million from General Motors in November as part of its ambitious plans of rolling out electric pickup trucks by the end of 2020. Lordstown Motors, which is 10% owned by Workhorse Group, however, has been struggling to move forward with its plans although it has been working towards the engineering of its first electric pickup truck Endurance.
"We structured the sales agreement to help support Lordstown Motors' launch plans for the Endurance pickup," said GM spokesman Jim Cain. The loan agreement was filed at Trumbull County last week. According to Detroit News, per the documents filed with the Trumbull County auditor, the open-ended mortgage could extend up to $50 million if needed,
Besides rolling out the all-new Endurance, Lordstown Motors will also upgrade the purchased facility for the production of the vehicle.
Ohio plant in focus
The fate of the Ohio plant came under political arc light after General Motors announced that it plans to close down the facility in November 2018. However, things somewhat cooled down after Lordstown Motors decided to acquire the factory along with the equipment to produce electric vehicles by 2020.
General Motors has sold the plans but has the option to repurchase the plant in the next six months. Moreover it also has the choice of leasing 500,000 sq. feet of property and another 400,000 sq. feet of land.
However, General Motors said that it is not investing in the venture but only entering into a mortgage of $40 million to produce the truck. Interestingly, General Motors along with South Korea's LG Chem last week announced that it will invest $2.3 billion to build a battery-cell plant in Ohio. The plant will come up in the area of its Lordstown assembly plant. The batteries will be used in GM's all-new electric vehicles. The company plans to have 20 all-electric varieties of vehicles by 2023.