Troubled electric vehicle company Lordstown is looking to fix things with the help of new chief executive officer Daniel Ninivaggi. The EV startup has hired auto sector veteran Ninivaggi for the top post almost two months after Steve Burns resigned from the post of CEO. The company was founded by Burns in the year 2019. Burns had to resign following allegations of misleading investors. The company has been going through tough times of late and the new CEO will have too many tasks to handle. Ninivaggi has a strong automotive background. He recently completed his tenure of 7 years as a member of the board of directors of Hertz. He helped the car rental company tackle the very public bankruptcy and restructuring. Ninivaggi’s last experience will definitely come in handy at Lordstown as the company has been facing a cash shortage. The company had even once said that it might not be able to deliver the vehicles on dates it had announced. Lordstown has now said that it is planning to deliver its first pickup trucks in early 2022. It is also the time frame till when the company can survive with the money it has. After that, it would need some new funding. The company is working on everything to launch on time its much-awaited fully electric pick-up truck. Lordstown Motors need someone who can steer the company through the adversities.
The Ohio electric automaker EV company has been struggling to survive ever since it announced the SPAC merger in 2020. Now Ninivaggi is the only ray of hope for the company. There are a lot of expectations from Ninivaggi because it was him who was at the helm when Hertz was in crisis. The car rental was in trouble during the initial months of the coronavirus pandemic. This is because the company had borrowed a huge amount of money against its fleet of cars. But the market dipped unexpectedly after the outbreak of coronavirus. This made lenders jittery and started mulling options of seizing those vehicles as they thought it would be the only way to recoup what they were owed. Following this, Hertz filed for bankruptcy. The real weirdness started after this. Soon after the stocks of the company became everyone’s favorite. People were busy buying its stocks without thinking about how much it would be worth when the company was eventually restructured. The company tried to cash in on the opportunity and tried to sell even more shares directly. However, it did not last long and a judge quickly cut them off.
When Hertz was going through all this turmoil, the largest shareholder of the company backed out. Carl Icahn was the largest shareholder of the company and he decided to sell his stakes in the company in mid-2020. Ironically, Ninivaggi – one of the former executives of Icahn, decided to stay on board of the company. The company managed to emerge from bankruptcy this year. And to the surprise of many, retail shareholders did manage to make some profit. Ninivaggi’s experience in the automotive industry is beyond Hertz’s. He has been with companies mostly involved in the supply chain. It was either Ninivaggi’s deep experience in the industry or his tenure with Hertz which was nothing less than a rollercoaster ride that attracted Lordstown Motors to him. No matter what, Lordstown Motors is paying him handsomely. He will get an annual salary of USD 750,000 to run the show. Moreover, he would be eligible for a yearly bonus of around USD 1 million. As per the filing with the Securities and Exchange Commission (SEC), Ninivaggi would also get a company stock package worth USD 4.6 million. But this would come with the main task of getting the company to start the production of its electric pickup truck. He will have to complete all these tasks while investigations by the Department of Justice and SEC continue.