This is part 1 of a 3 part series on the transition to clean energy in the Mahoning Valley
UPDATE 6/9/2021: The future of Lordstown Motors, an independent electric truck manufacturer considered an anchor of Voltage Valley in eastern Ohio, came into question Tuesday, when the company’s delayed quarterly and annual filings with the Securities and Exchange Commission were made public.
In it, the company states, “Our ability to continue as a going concern, which requires us to manage costs and obtain additional funding to ramp up the production phase of our operations, including to begin commercial-scale production, launch the sale of our vehicles and invest in research and development of additional products.”
Lordstown Motors shares dropped more than 16% late Tuesday after the financial warning.
The region including Lordstown, Youngstown, and Warren has been looking to the company to help drive its future in electrification, but now some see that light dimming.
Lordstown Motors says it is seeking additional funding, including a federal loan.
“We require additional capital to implement our business plan, and it may not be available on acceptable terms, if at all, creating substantial doubt as to our ability to continue as a going concern,” the company said in its SEC filing.
President Biden is pushing for electric vehicles as a solution to climate change, and a way to create jobs. One test case for this strategy: Ohio’s Mahoning Valley, near the border of Pennsylvania, which includes Youngstown, Warren and Lordstown.
This area lost big when the steel industry collapsed in the 1980s. Just a couple of years ago, General Motors closed the Lordstown Assembly plant, which built cars for Chevrolet. But leaders there now see a future emerging in electric cars and many are touting the region as Voltage Valley.
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The Loss of GM
Like his father and both his grandfathers, Travis Eastham worked at the General Motors assembly plant in Lordstown. Open since 1966, it employed 8,000 workers for years. Eastham started a few weeks before graduating high school. By 2019, as he was nearing retirement, and only 1,500 workers remained at the plant, GM abruptly closed it.
“It was a scary time. You don’t know what you’re going to do next in life,” Eastham said.
Like many of those whose jobs in Lordstown ended, he could have moved to Kentucky or elsewhere to work at another GM plant, but Eastham didn’t want to leave his family. He started working full-time as chief of the Lordstown Fire Department. But the closure hit the small community hard. Tax revenues were down, and people were worried.
“Everyone was concerned about selling their houses, what property values were going to be like,” Eastham said.
But now, just two years later, that’s changed. “All this industry that’s coming in now, houses are selling relatively quick,” he said. “Things are starting to make the turn.”
The Move to Electric Cars
The loss of GM’s assembly plant has given rise to something new: Lordstown Motors.
Lordstown Motors is a new, independent electric truck maker that’s getting ready to start production at the former GM plant. The company expects to roll out pickup trucks this year, but it has experienced a variety of early troubles. It now says production numbers will, at best, be half the level of prior expectations. Still, it anticipates employing 1,500 workers.
You can’t keep looking in the rearview mirror. You’ve got to keep looking ahead.
“There’s more cars here at Lordstown Motors every week,” said Lordstown Mayor Arno Hill, as he drove past the parking lot. His economic development tour of the village also included a new natural gas electricity plant and a new electric vehicle battery plant.
“With everything associated with electric, that’s how they came up with Voltage Valley,” Hill said. “You can’t keep looking in the rearview mirror. You’ve got to keep looking ahead.”
Hill thinks the $2.3 billion dollar battery plant under construction is the biggest project in Lordstown’s history. It’s being built by Ultium Cells, a joint venture of General Motors and LG Energy Solution. GM cited the region’s workforce as one reason Lordstown was chosen for a battery plant.
“We’re going to manufacture battery cells. A vehicle could have hundreds of cells to propel the vehicle,” explained Tom Gallagher is the company’s chief operating officer.
“I’m really excited,” Gallagher said of GM’s plans. “There’s going to be a range of cars, trucks, crossovers, SUVs, autonomous vehicles, and the options for customers are going to explode.”
Clean Energy Promises Economic Diversity for Former Steel Valley
In the past, the Mahoning Valley’s economy focused almost exclusively on the steel industry, according to Democratic Congressman Tim Ryan, who represents the region and is running for U.S. Senate. He and others have been looking for new ways to build the economy here for 20 years. He wants electric vehicles and batteries to be part of a more stable long-term strategy.
“The whole plan was how do you diversify the economy so that you almost have a portfolio of development that will grow and diminish, but you’ll never have what happened to our community, like when the steel industry collapsed,” Ryan said.
For Ryan, the path became clear during the Obama administration’s push for new manufacturing technology and climate action.
“In my mind, it was like we have to get into the energy area, the energy sector, because it just could go in so many different directions,” he said.
Almost any new energy product is a green energy product.
Ryan helped get funding to create a non-profit called BRITE Energy Innovators, which opened a decade ago in downtown Warren. BRITE works with startups and companies developing new energy products.
Its friendly, coffee shop vibe in the front windows gives way to an industrial lab space in the back. There, entrepreneurs are developing projects like solar panel mounts, games that incentivize energy savings, and coatings that extend the life of batteries.
“We thought 2020 was insane. We were seeing three or four new clients a week,” said Sara Dougherty, BRITE’s director of partnerships. “Now we’re about two a day of new inquiries, of whether or not they can work with us to bring their products to market. So it’s incredible the increase in demand.”
The non-profit’s work is already bearing fruit for Warren. One energy storage investment company working with BRITE recently purchased a former steel industry office building, and, according to the mayor of Warren, plans to build a clean-tech corridor downtown, with an estimated 200 jobs.
There has also seen natural gas production in this region in the past decade. Some business leaders expect an economic boost when Shell’s new ethane cracker opens next year in Pennsylvania. The plant, less than an hour’s drive away, will turn the region’s natural gas into plastics.
But Dougherty says BRITE doesn’t see much innovation around fossil fuels.
“Almost any new energy product is a green energy product,” she said. “It’s very hard for a dirty product to have viability on the market.”
Ohio Favors Fossil Fuels While Cities Embrace Clean Energy
Still, many Ohio lawmakers show a preference for fossil fuels and nuclear energy and have gutted the state’s renewable energy standards. Some have been hostile toward clean energy projects, especially wind power. Ohio ranks nearly last – 49th – among states when it comes to renewable energy.
But the city of Warren connects its future growth with renewable energy. It joined a coalition with other Ohio cities to take action on climate change and pledged to cut its carbon emissions 30 percent by 2030.
“My initial reaction was I cringed,” said Guy Coviello, president of the Youngstown-Warren Regional Chamber of Commerce.
He sees the electric vehicle and battery plants as anchors to the region’s claim as Voltage Valley and its future growth. But he’s cautious.
Trumbull County, home of Lordstown and Warren, voted for fossil-fuel supporting Donald Trump in 2020, and even Mahoning County, which had voted Democratic in every presidential election since 1972, favored Trump.
Coviello doesn’t want to send a message to prospective new businesses, like pipeline manufacturers or natural gas power plants, that the region favors renewables over fossil fuels.
“It just sends a chilling effect to companies that know that’s the mindset that they might be walking into,” he explained.
‘Planting a Flag’ for Clean Energy
But for Doug Franklin, Warren’s mayor for more than a decade, the region can’t follow the state’s lead of choosing fossil fuels over renewables. “There’s not one choice over the other,” he said. “You have to walk and chew gum at the same time. You have to be able to do multiple things.”
Warren hasn’t gotten a boost from natural gas, so he’s open to electrification and all that he expects it to bring to the city and the region.
“Do I just want to keep looking back? Maybe those coal jobs will come back. I can’t bet on it. And those fossil fuels, I can’t bet on it,” he said. “I know what it’s going to be in the future, so I have to plant my flag somewhere.
The region already expects 2,600 jobs at the electric vehicle and battery plants and more projects are on the way. The next big challenge for Voltage Valley may be having enough trained workers, and people willing to move there.