Things are not all good at electric vehicle startup Lordstown Motors for quite some time. And now, chief executive officer Steve Burns has stepped down from the post. This is not it. Chief financial officer Julio Rodriguez too has resigned. The development comes just a few weeks after the Burn assured investors that the General Motors-backed startup has a bright future. Lead Independent Director Angela Strand has now been appointed executive chairwoman. She will oversee the day-to-day affairs of the company and transition till the company appoints permanent CEO. Strand previously worked at Burns’ previous startup. Becky Roof has been given charge of interim CFO. Roof has worked in the same position in a number of companies. The list includes Eastman Kodak and Saks Fifth Avenue. This is all happening in the backdrop of an investigation preorders investigation. It has been alleged that Burns and several other top executives lied about preorders of the electric pickup trucks.
The investigation found that there were multiple occasions when the company’s representatives lied about preorders. It was found that Lordstown Motors executives maintained that the majority of the 100,000 non-binding preorders for pickup trucks were from commercial fleets. However, the investigation found it was not the case. Moreover, it was found that the entity which had given a majority of preorders doesn’t appear to have the resources to complete the deal. “Commitments given by other companies in the list appeared not very clear to count it as pre-orders. It was also found during the investigation that the startup paid a company to drum up around 1,000 preorders. Law firm Sullivan and Cromwell had conducted the probe into the allegations. The investigation was launched in March this year after a report published by short-selling firm Hindenburg Research made a series of allegations at Lordstown Motors. The main allegation was about preorders that the company presented to misled its investors.
Lordstown Motors was founded as an offshoot of Burn’s other company Workhorse Group. The company has been facing financial problems as well. Recently announced quarter results were also not impressive enough. Then came the news that the company would have to reduce the production target of vehicles to half if it fails to get more funding. The initial production target was 2,200. The EV startup went public through a SPAC last year. Following this, the company was valued at USD 1.6 billion. Commenting on the development, the company said that it thanks to Steve Burns ‘for his passion and commitment to the company.’