The recent report from short-seller Hindenburg Research has caused a lot of unfavorable attention for Lordstown Motors recently, with the SEC asking the company for information. Despite all of this, the Wall Street Journal reports that some residents of Lordstown, Ohio, and the surrounding area still warily believe the company will make it.
Some people are cautious. They still think Lordstown will pull it off, but they want the company to actually produce something first — people like former GM worker Brian Milo:
“People are optimistic, but it’s guarded optimism. It’s like, ‘We support this, we want this to work, but show me first. Prove it.”
The Journal also says the surrounding area is being aptly nicknamed “Voltage Valley.” Along with the Lordstown Motors plant, GM has partnered with LG Chem to build a $2 billion battery facility nearby. GM says this will create at least 1,100 new jobs.
Lordstown Motors promised even more jobs. CEO Steve Burns told the Journal that the company would have 4,000 workers eventually, with over 400 initially. This was in January 2019. As of the beginning of this year, there are only 171 people working in Ohio. This doesn’t include the 131 engineers at its tech center in Detroit.
City officials are even more cautious concerning Lordstown Motors. Understandably so, given the hit the city took when GM closed the plant. With how small the city is — Lordstown is actually a village of just over 3,200 people. The economic impact from the plant’s closure hit hard. Mayor Arno Hill estimates the annual income tax loss at $1 million per shift:
Arno Hill, Lordstown’s mayor, said the village took around a $1 million annual hit from lost income taxes for each of the three shifts laid off, as GM wound down the plant’s operations, starting in early 2017.
Considering how tight the city’s finances are, this has affected everything from filling city positions to how often the city buys fleet vehicles. Mayor Hill, however, is taking a smart approach to Lordstown. While some small cities would be all-in on a startup in their economically distressed town, Hill wants to see results before anything:
“Right now, I’m just in wait-and-see mode. You can’t have all your eggs in one basket. Lordstown’s future does not depend on Lordstown Motors.”
The local UAW is hopeful that the company does well, with the chapter president hoping the company does well enough for the UAW to organize them. That’s if the factory ever gets up and running. Whatever the outcome with Lordstown, whether some like it or not, it will have lasting effects on the local economy. I just hope it’s not to the detriment of people and their livelihoods.