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Shortly before electric carmaker Tesla triumphantly entered the S&P 500 this week, a future competitor of the Californian star company made its largely unnoticed stock market debut: Lordstown Motors, which is not headquartered in one of the startup metropolises, but in America’s dingy rust belt: in Lordstown, Ohio. However, in terms of ambitions, the newcomer’s boss can definitely take on Elon Musk. Steve Burns wants to build “the world’s first fully electric van for corporate fleets.” The tech entrepreneur praises himself because this innovation comes from Lordstown. Its goal is 600,000 vehicles per year, more than Tesla produces today, 17 years after its founding.
At the moment, Burns’ dream seems quite remote. The start of production was postponed until fall 2021 due to the pandemic. Yet from the point of view of some politicians, the return of a region is sealed, the decline of which began when the steelworks in nearby Youngstown on “Black Monday” 1977 threw thousands of workers onto the streets. But now the Mahoning Valley in Northeast Ohio will reinvent itself as the “Valley of Voltage.” “The future is bright,” said the mayor of Lordstown before the first silver “Endurance” prototype took the factory podium in the summer. A guest from Washington got out of the car: Vice President Mike Pence. He brought greetings from Donald Trump, “the best friend the American auto industry has ever had in the Oval Office.”
In reality, neither the American auto industry nor the folks at Lords and Youngstowns owe much to Trump. Lordstown Motors built its business on the ruins: For $ 20 million, and with the help of a $ 40 million loan from the previous owner, the startup took over General Motors’ disused car plant in Lordstown in 2019 , including your inventory. But without workers.
“Don’t move, don’t sell your houses,” Trump had yelled to the cheering crowd two years earlier during a performance in Youngstown. But there was no industrial renaissance. The number of industrial workers in and around Youngstown dropped 14 percent in the three years after he took office in early 2017. A loss of 4,000 jobs.
Most of the last 1,500 employees at GM’s auto factory accepted the company’s offer to move to another location somewhere in the United States. Tim O’Hara also sold his house. He left the house where he and his two daughters grew up and moved to Kentucky, a mile away. The 61-year-old has already retired after more than four decades at GM, but his wife has a few more years left.
Perhaps he would have found something new in the self-proclaimed Valley of Voltage, in Lordstown Motors, or in the battery factory that GM is building together with its Korean partner LG Chem and that will one day employ 1,100 people. In any case, tariff conditions would have been significantly worse than before at GM. Local auto union UAW 1112, once led by Tim O’Hara, is now orphaned. “We still have 20 active members,” O’Hara says. Once upon a time more than a thousand.
But Trump’s broken promises to help the region emerge from the crisis have done no harm. On the contrary: in the presidential election in November, he was the first Republican since 1972 to win Mahoning County. In neighboring Trumbull County, where GM’s abandoned Lordstown factory is located, he outscored challenger Biden by more than ten percentage points.
O’Hara suspects that it is also due to the exodus of unionists like him that the Democrats have lost support in the former steel region: “It’s 1000 or 2000 votes that normally would have gone to Biden.” And in recent years many young people have also moved in search of a better future.
David Betras has a different explanation for Trump’s triumph. The night before, the former chairman of the Mahoning County Democrats had a meeting at the restaurant that had repercussions. A young man at the next table explained to him in detail that Trump’s election victory had been stolen and he entered into conspiracy fantasies like Hillary Clinton drinking baby blood. Betras addressed an acquaintance from a couple of tables down the street who she thinks is “a smart man.” “Do you see where that got us?” He asked the Trump voter, referring to the stark theories of the person sitting next to him. “Hmm,” he replied, “but Trump did a good job.”
Betras is convinced that logic can no longer be used to reach Trump voters: “Right is left, left is right, up is down, down is up.” And so the supporters of the former president in Mahoning are also convinced “that he has done a lot of good for the economy here,” says Betras sarcastically.
Now it could be Trump’s successor, of all people, who is helping the Mahoning Valley with the long-awaited rebound. Biden has made the switch to electric mobility a priority for his government.
Therefore, investment bank Goldman Sachs is confident that Lordstown Motors has a bright future ahead of it. At the beginning of the stock market, investment experts gave a buy recommendation for the stock “RIDE” – this is the name under which the company operates after a merger on the stock exchange. However, there are also risks, the analysts write in their report: if the start of “Endurance” sales is further delayed or if CEO Burns does not capture the market share he dreams of.
Phoenix’s electric truck startup Nicola, which has entered deep turbulence, has shown how quickly hopes can burst. Meanwhile, Nicola’s stock is down 80 percent compared to its summer high.
However, Lordstown Motors CEO Burns is confident that he will reach “the promised land” when his “resistance” hits the road. Shortly before Christmas, he made a great promise to the people of Lordstown when they performed at the six million square meter factory that once ran day and night: “The goal is to get more people working here than in GM’s best days.” .
O’Hara, a former GM employee, would like to believe this will happen. The unionist says there is great hope in his home country. “But also skepticism.”
