Rosetown Motors, the troubled electric pickup truck company that bought a closed General Motors plant in Ohio, filed for bankruptcy protection on Tuesday.
The company, which was once praised by former President Donald J. Trump for keeping manufacturing jobs, was unable to build and sell many trucks due to repeated setbacks in development and frequent management changes.
The Chapter 11 bankruptcy filing was sparked by a dispute with major investor Foxconn, a contract manufacturing company based in Taiwan. Foxconn said it breached its investment agreement because Rosetown’s stock price fell below $1 a share. Rosetown said Tuesday it has sued Foxconn for failing to honor a contract to invest additional funds in the company.
Lordstown was founded in 2018 by Steve Burns, former CEO of another electric vehicle company called Workhorse Group. The company purchased the former GM plant in Rosetown, Ohio, which produced Chevrolet Cruze sedans. Trump promoted the deal on Twitter even before it was signed.
Rosetown wanted to build a revolutionary truck that used an electric motor in each wheel hub, but turning that idea into a production-ready vehicle proved difficult. Even in its heyday, the company employed some of the employees who once built cars for GM in Rosetown, between Cleveland and Pittsburgh.
Rosetown Motors sold the factory to Foxconn in 2021. The company is best known for assembling Apple iPhones at its sprawling factory campus in China.
Rosetown shares fell more than 50% in early Tuesday trading to about $1.20. In early 2021, when investors were incredibly optimistic about the electric-vehicle startup’s prospects, the company was trading around $400, adjusted for a recent stock split. In October 2020, Rosetown merged with special-purpose acquisition company Diamond Peak Holdings and listed on the Nasdaq Stock Exchange.
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