Lordstown Motors CEO resigns after investigation into preorders
0Reported today on The Verge
For the full article visit: https://www.theverge.com/2021/6/14/22532976/lordstown-motors-ceo-steve-burns-resign-short-seller-investigation
Reported today in The Verge.
Lordstown Motors CEO resigns after investigation into preorders
Steve Burns, the CEO of General Motors-backed startup Lordstown Motors, has resigned following an investigation into allegations that he and other executives lied about preorders for the company's electric pickup truck. The startup's chief financial officer Julio Rodriguez has also resigned.
The resignations come just weeks after Lordstown Motors admitted that it needs more money to execute on its production plans for the pickup truck, despite raising nearly $700 million late last year.
The investigation found that while Lordstown Motors said on multiple occasions that a majority of the 100,000 non-binding preorders it collected were from commercial fleets, this was not the case. It discovered that "one entity that provided a large number of pre-orders does not appear to have the resources to complete large purchases of trucks," and that other companies on the list "provided commitments that appear too vague or infirm to be appropriately included in the total number of pre-orders disclosed." The firm's probe also confirmed that Lordstown Motors paid a company to drum up around 1,000 preorders.
"We thank Steve Burns for his passion and commitment to the company," the startup said in a statement. Burns will be temporarily replaced by Angela Strand, who is an independent board member at Lordstown Motors, though she formerly worked at Burns' previous EV startup, Workhorse. Becky Roof, a certified public accountant and former CFO, will temporarily replace Rodriguez. "We have complete confidence in Angela and Becky, and our expanded leadership team, to effectively guide the company during this interim period," the company said.
The probe, which was conducted by law firm Sullivan and